Josh Filzen, professor and director of the Master of Accountancy program, had his paper, “Audit Committee Member Busyness and Risk Factor Disclosure,” accepted for publication in The British Accounting Review. The study, co-authored by Christina Bailey, shows that when audit committee members are stretched too thin, it can weaken the quality of risk reporting.
Filzen and Bailey find that companies with overburdened audit committee members tend to produce lower-quality risk disclosures–meaning the reports are harder to read and less focused on key business details. While these companies do provide timely updates on risks, the updates are often vague and not particularly useful to investors. They explain that these negative effects are primarily due to members’ involvement in other non-audit roles, and the issue is even more pronounced in businesses facing high uncertainty or complexity.