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ACCA Applied Knowledge · Financial Accounting · Duties and responsibilities of those charged with governance

Which of the following best describes the role of the nomination committee?

The nomination committee evaluates the board's balance of skills, experience and independence and recommends appointments of new directors. It does not review internal controls, agree audit fees or set dividends, which belong to the audit committee or the full board.

  1. AReviewing the adequacy of internal controls over financial reporting
  2. BEvaluating the board's balance of skills and making recommendations on appointments of directorsCorrect
  3. CAgreeing the audit fee with the external auditor
  4. DSetting the dividend payable to ordinary shareholders

Explanation

The nomination committee reviews the structure, size and composition of the board and leads the process for new director appointments, recommending candidates to the board. Internal control review and audit fee matters belong to the audit committee, and dividends are proposed by the board.

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