ACCA Applied Knowledge · Financial Accounting · Duties and responsibilities of those charged with governance
Which of the following statements about the nomination committee is correct?
The nomination committee reviews the structure, size and composition of the board and leads the appointment process for new directors, recommending candidates to the board. It does not approve accounts, negotiate audit fees or set dividends, which fall to the board or audit committee.
- AIt approves the annual financial statements before they are issued to the auditor
- BIt reviews board structure and composition and leads the process for new board appointmentsCorrect
- CIt agrees the audit fee with the external auditor
- DIt sets the dividend to be paid to shareholders
Explanation
The nomination committee considers the balance of skills, experience and independence on the board and manages the selection of new directors, making recommendations to the board. Audit fees fall under the audit committee and board, and dividends are proposed by the board and approved by shareholders. Approving the financial statements is a board responsibility.
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