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CAQ, Audit Analytics Release Findings from New Audit Committee Transparency Barometer

Tuesday, December 2, 2014

First-Time Effort Assesses Audit Committee Disclosures in Proxy Statements of

1,500 Companies in the S&P Composite Indices

Washington, DC – The Center for Audit Quality (CAQ), together with Audit Analytics, has undertaken an extensive analysis of 2014 audit committee disclosures in proxy statements, applying a “barometer” for the first time to measure the robustness of these disclosures among 1,500 Standard & Poor’s (S&P) composite companies. Public disclosures are the primary channel through which audit committees can inform and educate investors and other stakeholders about their critical responsibilities, and demonstrate their effectiveness in executing those responsibilities. 

The Audit Committee Transparency Barometer measures the content of proxy statement disclosures in certain key areas, including auditor oversight and audit committee scope of duties. This information will serve as a baseline reference point measurement for reporting by companies in these indices in future proxy seasons.

“We think it is important to provide a baseline for audit committee disclosures, with the intent of tracking trends and leading practices on an annual basis moving forward,” said CAQ Executive Director Cindy Fornelli. “Greater transparency about the audit committee’s roles and responsibilities provides an opportunity to communicate more clearly to shareholders about one of its key responsibilities, auditor oversight, which in turn may enhance audit quality.”

“We are excited to be working with the CAQ on this market assessment project,” said Mark Cheffers, CEO of Audit Analytics. “The new Audit Committee Transparency Barometer will provide deeper insight into proxy disclosure trends and inform audit committees and shareholders alike.” 

In this research effort, the CAQ and Audit Analytics reviewed the most current proxies (filed through the end of June 2014) of 1,500 S&P composite companies, including companies in the S&P 500, S&P MidCap 400 (S&P MidCap), and S&P SmallCap 600 (S&P SmallCap) indices.

Some of the key findings include:

  • 83% of S&P 500, 69% of S&P MidCap, and 58% of S&P SmallCap companies discussed in their proxy statements how non-audit services may impact independence.
  • 47% of S&P 500, 42% of S&P MidCap, and 50% of S&P SmallCap companies disclosed in their proxy statements the length of time an auditor has been engaged.
  • 13% of S&P 500, 10% of S&P MidCap, and 8% of S&P SmallCap companies discussed in their proxy statements the audit committee’s considerations in appointing the auditor in terms of qualifications, geographic reach and firm expertise. 
  • 13% of S&P 500, 4% of S&P MidCap and 1% of S&P SmallCap companies discussed in their proxy statements audit fees and their connection to audit quality.

Both the CAQ and Audit Analytics look forward to future readings of the Audit Committee Transparency Barometer to gauge further enhancement in audit committee disclosures. Given continued regulatory focus on this area, the Barometer can provide fresh perspective to companies as they assess their approach to these disclosures.

The Barometer is available here:


About the CAQ

The Center for Audit Quality (CAQ) is an autonomous, nonpartisan public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit

About Audit Analytics®

Audit Analytics is an independent research provider that enables the accounting, legal and investment communities to analyze auditor market intelligence, public company disclosure trends and risk indicators. For more information please e-mail or call 508-476-7007.