The Expanded Responsibilities of the Audit Committee: A New Mandate

Earlier this year, the Securities and Exchange Commission (SEC) issued the Sarbanes-Oxley Act of 2002 (SOX), to mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud.

Among other things, SOX expanded and formalized the responsibilities of audit committees. At this time, it may make sense for audit committees to evaluate where their compliance activities stand relative to the timetable of legal and regulatory requirements they must address. This issue of The Bulletin explores the new requirements of audit committees and their implications, and suggests six keys to an effectively functioning audit committee.