Case | HBS Case Collection | June 2009

The Role of the Audit Committee in Risk Oversight

by Jay W. Lorsch and Kaitlyn Simpson

Abstract

An audit committee chair considers how he can help his committee become more effective given the increasing regulatory demands on audit committees. He also wrestles with the lack of specificity in audit committee duties and whether his committee should take on additional responsibilities. In particular, he considers the growing concern over risk oversight and wonders what kinds of risks the audit committee should consider and whether they should be the sole repository for risk management. This case includes a historical overview of the beginnings and evolution of audit committees, and the laws and regulations that have affected their role over time.

Keywords: Accounting Audits; Corporate Governance; Governing Rules, Regulations, and Reforms; Governing and Advisory Boards; Laws and Statutes; Risk Management;

Citation:

Lorsch, Jay W., and Kaitlyn Simpson. "The Role of the Audit Committee in Risk Oversight." Harvard Business School Case 409-016, June 2009.