What is an audit committee?

Question

Quizplus · Accepted Answer

An audit committee is a subset of a corporate board of directors that is responsible for overseeing the financial reporting process, the internal control system, and the audit process of the organization. The audit committee is typically composed of non-executive board members and is meant to provide independent oversight and an additional layer of accountability for the organization's financial reporting and audit processes. A is incorrect because audit firms do not develop national or international auditing standards, that is the responsibility of standard-setting bodies such as the IASB and FASB. C is incorrect because the team of external auditors is not the same as an audit committee, and do not have oversight responsibilities. D is incorrect because negotiating the audit engagement is a responsibility of management, not the audit committee.

What Is an Audit Committee