The Sarbanes-Oxley Act requires that the audit committee be composed of
A)at least 50 percent of key officers who are on the board of directors.
B)a majority of all of the members of the board of directors.
C)the outside members of the board of directors and the external auditor.
D)entirely outside members of the board of directors.

Question

Quizplus · Accepted Answer

The Sarbanes-Oxley Act requires that the audit committee be composed entirely of outside members of the board of directors. This is to ensure that the committee is independent and objective in its oversight of the company's financial reporting and audit processes. The outside members are not affiliated with the company, and are therefore less likely to have conflicts of interest that could compromise their judgment.

The Sarbanes-Oxley Act Requires That the Audit Committee Be Composed