Purchase Solution

The Importance of the Audit Committee

Not what you're looking for?

Ask Custom Question

The audit committee helps to assure independence. The audit committee is comprised of directors, not managers, and their job is to appoint, retain, oversee, evaluate and terminate the audit firm. I think this is important because the process is not administered by executive level management, but the Board of Directors. I think the audit committee is an important initiative.

Purchase this Solution
Solution Summary

The solution explains the importance of the Audit Committee in assuring independence. References are included.

Solution Preview

According to George, the importance of governance in organizations was the public's focus after the corporate scandals that paved the way to legislations like the Sarbanes-Oxley Act in 2002. Audit committees which are effective can increase the efficiency and integrity of the entire audit process, together with the system of internal controls and the financial reporting methods. An audit committee is an essential element of accountability and governance. (George, 2005)

Audit committees are important in establishing sound governance in public and nonpublic companies. Organizations which have multiple owners (e.g., stockholders) and/or the public government and non-profit organizations must establish an audit committee or an equivalent group with the same functions. The management and the governing board of the company ...

Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Introduction to Finance

This quiz test introductory finance topics.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • What can Audit Committee do to ensure auditor independence

    The job of the audit committee is 1. to design and control training programs which emphasize the importance of independence which includes stating factors that can impede independence. 2. to require each professional assigned to an audit engagement

  • Audit Committee vs. Compensation Committee

    Therefore, we could say that the audit committee ranks above the compensation committee in overall importance in regards to corporate governance.

  • Analyzing the Responsibility of the Audit Committee

    478075 Analyzing the Responsibility of the Audit Committee Analyzing the Responsibility of the Audit Committee The role of directors and committees in financial reporting and accounting oversight continues to evolve as a result of Sarbanes-Oxley and

  • Standards for Internal Auditors and Fraud Examiners

    The solution discusses the importance of internal auditors and fraud examiners.

  • Corporate Governance

    The audit committee discusses with the external auditor the type of audit that will be pefromed and the scope of the audit. the audit committee should discuss any problems and reservation arising out of audits.

  • Audit Committee

    An audit committee is composed of a group of independent persons (persons not in employment of the company) which acts as an interface between the board of directors and the management of a company.

  • Internal Auditing

    her reports to the Chair of the Audit Committee.

  • ethics, testing, sampling, PCAOB

    Which of the following is NOT a factor the auditor should consider in making this evaluation? A. The independence of the audit committee from management B. Compensation practices with respect to members of the audit committee C.

  • The Sarbanes-Oxley Act and the PCAOB

    the importance of the SOX Act and the requirements and responsibilities that the Act establishes for the auditors in charge of an annual audit.

View More Related Solutions