Audit committee chairs may find resonance in the phrase “tragedy of the horizon”, an expression coined in 2015 by Bank of England governor Mark Carney, which refers to the paradox that arises when market actors must take urgent action to address a long-term risk—but have no observable short-term incentive to do so. Carney was talking about climate change. But his warning can be read as a routine job description for board directors. Of course they have to monitor a company’s current business operations. But they also need to keep a weather eye on changes on the horizon that may not be obvious to executives in charge of day-to-day management and who, as a result, may resist such insights. Perhaps no area is in more need of such dual attention from directors than the outside audit. Board members—especially those in audit committees—have a clear responsibility to oversee compliance with current rules. But radical changes in the external audit appear to be coming: in what is being assessed, how, by whom, and for whom. So now may be an appropriate time to scan the horizon so that companies can be prepared.

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