College and university audit committees can expect their institutions’ financial reporting, compliance, risk, and internal control environments to be tested by an array of challenges in the year ahead, from cyber risks, to social risks—including continued stress in attracting and retaining talent. The increasing complexity and fusion of risks—and their unexpected interconnectedness—put a premium on more holistic institutional risk management and oversight. In this volatile operating environment, demands from creditors, donors, grantors, and other stakeholders for action, as well as increased disclosure and transparency, will continue to intensify.
Drawing on insights from our interactions with higher education audit committees and senior administrators, we’ve highlighted several issues to keep in mind as audit committees consider and carry out their 2023 agendas:
- Maintain a sharp focus on leadership and talent in finance and other key functions.
- Understand how the institution is managing and reporting on environmental, social, and governance (ESG) risks.
- Keep a watchful eye on the institution’s management of cybersecurity risks.
- Sharpen the institution’s focus on ethics, compliance, and culture.
- Help ensure internal audit is focused on the institution’s key risks—beyond financial reporting and compliance—and is a valuable resource for the audit committee.
- Reinforce audit quality and set clear expectations for frequent, candid, and open communications with the external auditor.
- Take a fresh look at the audit committee’s agenda, workload, and capabilities.