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How Hard Is Audit Committee Reform? Here’s One Example

Matt Kelly | July 27, 2015

Never, in all my years of writing about corporate mismanagement and governance gone awry, have I seen unhappy investors survey the wreckage and then holler, “Why the hell was the audit committee’s role so poorly defined?” Instead, they always holler, “What the hell was the audit committee doing?”

And in our hyper-capitalist society, where so much of your fortune depends on the value of the assets you own, investors have a right to know.

So I strongly suspect that as we wade into the governance debate of the summer—how the Securities and Exchange Commission should reform required disclosures for corporate audit committees—we’ll hear quite a lot about that idea. The SEC even says as much in its 55-page concept release on audit committees, published July 1. Smack in the middle of Page 18 (emphasis added): “While current audit committee reporting requirements provide information about the role of the...

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