Which of the following characteristics of a company’s Board of directors Audit Committee is “least likely” required to ensure that they are adequately representing shareowner interests? A) Any conflict between the external auditor and the firm are resolved in a manner that favors shareholders B) The shareholders vote on whether to approve of the board’s selection of the external auditor C) The committee regularly reviews the performance, independence, skills and experience of existing board members D) The external auditor is free from mgmt influence
C? Mentions nothing about “audit”. But just a guess. Maybe A too?
I’m going with B. Others do make sense, but it’s not reasonable for shareholders to approve the board’s selection of the external auditors. That’s why it’s so important to choose independent and professional board members.
I think it’s B as well, for the reasons that maratikus mentioned.
Right answer is C
parry, did they explain why?
No, it just gave me the letter answer. C would have been my last guess… maybe the book is wrong?
is this from book 6? if so, which test and Q#? I can post the answer, if you like.
nm, found it. Question 78 - #44915 C is the correct answer. Regularly reviewing performance, independence, skills, and experience of existing board members is a characteristic of the Remunerations/Compensation Committee, not the Audit Committee. All other choices are positive characteristics of the Audit Committee. anyway, just goes to show how important it is to read the questions carefully.
unexpected answer. good to know though …