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Typically, a CEO should not sit on the Audit Committee due to potential conflicts of interest. The Audit Committee is responsible for overseeing financial reporting and the audit process, which requires independence from management. Having the CEO on the committee could compromise the objectivity needed in reviewing financial matters, as the CEO is part of the management team that the committee is meant to oversee. Thus, best practices in corporate governance generally advise against it.
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What are the advantages in having an audit committee?
the audit committee communicate with internal audit, external audit and CFO on behalf of the company.
What was a major contributor to the collapse of Enron in 2001?
Lax oversight by the company's audit committee
Who should internal audit department report to?
The internal audit department should ideally report to the board of directors or an audit committee within the board, rather than management. This structure helps ensure independence and objectivity in the audit process, allowing auditors to provide unbiased assessments of the organization's risk management, control, and governance processes. Reporting to the board also fosters transparency and accountability, enhancing the overall effectiveness of the internal audit function.
Who is responsible for making sure an organization's internal control system is adequate?
The board of directors and its audit committee have responsibility for making sure the internal control system within the organization is adequate
Difference between audit plan and audit program?
an audit program may contain several audit plans
What are the advantages in having an audit committee?
the audit committee communicate with internal audit, external audit and CFO on behalf of the company.
What resources does the American Institute of Certified Public Accountants' Audit Committee Effectiveness Center provide?
The components of the center are the Audit Committee Toolkits (corporate, not-for-profit, and government), Audit Committee Matching System, Audit Committee e-Alerts, and a bank of materials containing information for and about audit committees.
Is the audit committee part of internal audit?
audit committee is part of board, and it showcases the audit observations and present it to board. board comprises of external directors so a fair and transparency is ensured.
Can audit committee protect minority shareholder interest?
Most of Audit Committee INED are friends of Chairman, so they are not really independent!
What did oxley do?
strengthening the hand of the board of directors and the audit committee; enhancing the professionalism of outside auditors; and requiring fairness sign-offs by the chief executive officer (CEO) and the chief accounting officer.
What is audit committee?
Audit Committe enhance communication between Internal Audit, External Audit and CFO. Audit Committe assist directors to avoid litigatio risk.
What did Sarbanes-Oxley do?
strengthening the hand of the board of directors and the audit committee; enhancing the professionalism of outside auditors; and requiring fairness sign-offs by the chief executive officer (CEO) and the chief accounting officer.
What is one of the requirements that must be met in order for audit committee members to meet the standard of independence?
a member of an audit committee of an issuer may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee--accept any consulting, advisory, or other compensatory fee from the issuer
Is there a requirement that an audit committee be independent?
Section 301 of the act contains an amendment to Section 10A of the Securities Exchange Act of 1934, which relates to independence of audit committee members.
What is the origin of audit committee?
United state (new york)
What is it called when you sit in on a class that you are not registered for?
audit
Who is the auditor for IBM?
IBM accounting audits are governed by the Audit Committee which reports directly to the board of directors. The Audit Committee works with both the IBM in-house accounting department heads and an external accounting audit team (currently Pricewaterhouse Coopers LLC).
