Checklist: Enhance Your Audit Committee’s Performance

With rising expectations for audit committees amid increased regulatory scrutiny and economic uncertainty, it’s vital for committee members to have actionable strategies that can help improve their collective performance and effectiveness. During our “June 2025 Financial Services Audit Committee Overview” webinar, members of the Crowe team covered some of these strategies and have compiled them in a comprehensive checklist for audit committees.

Structure your audit committee for peak effectiveness 

• Define the chair’s role and responsibilities, which should include the following:
  • Model and apply effective leadership skills.
  • Set the meeting agenda (including allocating appropriate time for each topic) and prepare any pre-meeting materials.
  • Manage meeting time efficiently while encouraging participation and leaving space for committee members to openly express their opinions.
  • Build strong relationships with audit committee attendees, including internal audit and external audit leadership.
  • Serve as a first point of contact to address issues including fraud, reporting issues, and regulatory concerns.
  • Balance independence with interaction with management.
• Define evolving expectations for committee members, which should include the following:
  • Maintain active engagement, not just passive attendance.
    • Prepare thoroughly for each meeting and possess soft skills such as communication, collaboration, and problem-solving. 
  • Employ critical thinking, independent judgment, and a willingness to challenge ideas.
    • Engage in continual learning on a variety of topics. Standing agenda items should include education regarding emerging topics such as AI, cybersecurity, and new regulations. 
    • Consider supplemental training for new audit committee members.

Optimize audit committee meetings for success

• Create a defined meeting structure and manage the agenda closely.
  • Plan time to meet at least quarterly.
  • Balance procedural topics with in-depth discussions.
  • Include dashboards and heat maps in management reports for better visibility.
  • Discuss any changes in the control environment (such as changes to personnel, systems, and leadership) as well as emerging risks for your industry and institution and their effect on your control environment.
  • Consider including these sample meeting topics:
    • Internal audit report results
    • Status of management action plans in response to audit and exam findings
    • Audit calendar and schedule
    • External audit update and key estimate review
    • Policy and charter reviews
    • Whistleblower matters
• Schedule and conduct separate executive sessions.
  • Keep these sessions routine and encourage openness, with separate sessions for internal and external auditors to answer key questions. 
  • Questions to ask internal auditors include:
    • What are areas of concern that have not been addressed due to budget or time constraints?
    • How do you engage with the business units? Do you talk about risks before they happen?
  • Questions to ask external auditors include:
    • Were you provided with all the information you requested? Do you have any reason to believe that information was withheld from you or that management representations were incorrect?
    • Were there any disagreements regarding accounting, auditing, or reporting matters between you and management? If so, how were they resolved?
• Embed emerging risks into the agenda.
  • While audit committee members might understand emerging risks, that does not make them experts, so it’s vital to discuss emerging risks in each meeting and create a plan to address those risks. This plan might include the following:
    • Financial reporting and disclosures. Stress test sensitive assumptions, such as credit loss estimates. 
    • Legal and regulatory compliance. Prepare for threshold-driven compliance, such as the $10 billion asset mark. 
    • Information technology and security. Address data flow, AI use, and cybersecurity practices. 

Cultivate traits of a high-functioning audit committee 

• Be present and participate. Allocate dedicated time, stay current, and actively engage. 
• Connect the dots across meetings. Look (and ask) for themes in the meeting and connect those themes to determine action items or next steps.
• Think ahead and anticipate risk. Expect and consider the effect of future events on the business, including strategic initiatives, disclosure requirements, significant estimates, the regulatory environment, the economic environment, and leadership changes. 
• Challenge the status quo. Ask uncomfortable questions. Focus not on the quantity of the questions asked but on their quality and impact. 
• Embrace continual improvement and education. Discuss emerging topics and how they will affect the organization, and consider engaging in formal education when needed.

Guiding institutions through uncertainty and change is a vital part of the audit committee’s role. Those that commit to learning, questioning, and evolving can help effectively lead their institutions into the future with confidence.