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

Lintel Pharma's audit committee is considering its responsibilities. Which activity is most appropriately within the remit of the audit committee?

The audit committee should review the effectiveness of internal controls and the external auditor's independence. These oversight tasks support reliable financial reporting, while pay, board nominations and strategy fall to the remuneration committee, nomination committee and full board respectively.

  1. AReviewing the effectiveness of internal controls and the independence of the external auditorCorrect
  2. BSetting the pay of the executive directors
  3. CSelecting the company's long-term product strategy
  4. DNominating new candidates for the board

Explanation

The audit committee oversees financial reporting, internal control, internal audit and the external auditor's independence. Executive pay belongs to the remuneration committee and board nominations to the nomination committee. Product strategy is for the full board.

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