Skip to content

ACCA Strategic Professional · Strategic Business Leader · The board of directors

Karolis SA's audit committee has been asked by the board to strengthen the integrity of external reporting. Which of the following responsibilities would be MOST appropriate for the audit committee under typical corporate governance codes?

The audit committee should review the external auditor's independence and objectivity and recommend its appointment. This sits within its oversight of financial reporting, internal control and audit, whereas pay, appointments and strategy belong to other committees or the full board.

  1. AReviewing the independence and objectivity of the external auditor and recommending its appointmentCorrect
  2. BSetting the salary and share options of executive directors
  3. CProposing candidates to fill a vacancy for chief executive
  4. DApproving the company's corporate strategy and acquisitions

Explanation

Audit committees oversee financial reporting, internal controls, internal audit and the external auditor relationship, including auditor independence and recommending appointment. Pay is for the remuneration committee, appointments for the nomination committee, and strategy remains with the full board.

Did you get it right without looking?

One question tells you little. A timed set on The board of directors shows your real accuracy, how long you take and where you lose marks.

Practise The board of directorsFree diagnostic mock

More The board of directors questions