What is the Expected Responsibility of the Audit Committee as Compared to the Board with Respect to Risk Oversight?

Currently, there is debate over the division of responsibilities between the board of directors and other committees of the board (e.g., audit, compensation, finance and nominating committees), specifically with respect to risk oversight. While most agree that risk management is a shared responsibility, many would agree that audit committees should focus on risks related to financial reporting and not be overloaded with an organization’s entire risk matrix. Generally, the full board should oversee the strategic risks facing the organization and the audit committee’s responsibility for risk is narrowed to risks within the audit committee’s core areas of oversight – financial reporting, compliance, IT and sometimes, financial risks.

UP NEXT: What is the Audit Committee’s Role in Prevention, Deterrence and Detection of Fraud?

GO BACK: Effective Audit Committee Guide