Which of the following statements is true?
A)The audit committee provides contact between the board of directors and the key officers of the company.
B)The audit committee has become less involved in the financial accounting system as a result of the Foreign Corrupt Practices Act.
C)The audit committee is a subset of individuals on the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.
D)The board of directors consists of the company's external auditors.

Question

Quizplus · Accepted Answer

The audit committee is indeed a subset of the board of directors, specifically tasked with oversight of the financial reporting and disclosure process. This committee serves as the liaison between the board, the company's independent auditors, and management, ensuring the integrity of the company's financial statements and compliance with legal and regulatory requirements. It does not consist of the company's external auditors, nor has its involvement in the financial accounting system diminished due to legislation like the Foreign Corrupt Practices Act. Instead, such regulations have typically increased the responsibilities and importance of the audit committee.

Which of the Following Statements Is True