We examine the role of audit committees (ACs) in overseeing risks beyond the financial reporting process in the context of short selling threats. Firms subject to threats from short sellers are more protective of private information and demand stronger monitoring of financial disclosures. Given that AC members are likely to possess private information that is useful to short-sellers and are responsible for monitoring the financial disclosure process, we examine whether and how firms facing an increase in short-selling threats incentivize AC members to protect the firm’s private information and improve the quality of financial disclosures. Using the implementation of the Reg SHO as an exogenous increase in the credible threat from short-selling, our difference-in-differences (DID) results show that affected firms are more likely to increase AC members’ equity pay. Our evidence also suggests that the increased equity pay to AC members is related to reduced information leakage, increased financial reporting quality, and AC-led actions to defend against short sellers’ allegations. The effect is more pronounced for firms with more private information, more short interest and option trading, greater demand for AC monitoring, weaker monitoring from the board, and AC members who are prone to information leakage. Additional analyses suggest that our results are not driven by the change in AC composition following the SHO events and are robust to several meaningful falsification designs and sensitivity analyses. Overall, we shed light on the role played by AC in facing credible short-selling threats.