The table below suggests that some organizations do not have the same diligence in developing a system of tracking how close they are to covenant thresholds compared to their diligence in control over financial reporting, as required by SOX. It isn't important for our purposes, but FCPA is the Foreign Corrupt Practices Act. Practice Corporate Policy A clear understanding of prohibited actions and requirements People with assigned responsibility for compliance Depth of coverage within the company Documenting compliance by specific individuals Results regularly reported to the Audit Committee Debt Compliance* 50% 47% do not have a compre- hensive covenant checklist and 28% do not have a debt calendar 69% Generally confined within HQ Treasury, Legal and Accounting 44% 28% FCPA 100% 100% BOGN 100% All foreign units + HQ departments 100% 100% SOX 100%. 100% 100% All units +HQ departments 100% 100% Requirement: Speculate on why audit committees do not regularly ask about debt compliance. Feel free to speculate on any factor that you wish, including that whether an audit committee asks varies with how financially distressed the company is. Maybe the 28% who asked were financially distressed and had a reason to bring it up. Or, it might important that debt covenants are sometime built on variations from GAAP, like the non-GAAP figure, Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA), and the audit committee is less concerned about non-GAAP measures. Does that relieve them of responsibility for what management states as the non-GAAP figure.