What is the main purpose of an audit committee in corporate governance?
Correct answer: D. To oversee financial reporting, internal controls, and external audit
- A. To approve every purchase made by department managers
- B. To conduct the daily recruitment of operational employees
- C. To set the prices charged to the company's customers
- D. To oversee financial reporting, internal controls, and external audit
Explanation
An audit committee supports the board by reviewing financial reporting, internal control systems, and the external audit process. It does not replace management in routine operations.
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About Business Ethics and Corporate Governance
Business ethics applies principles such as honesty, fairness, responsibility and transparency to decisions involving employees, customers, investors, competitors and society. Corporate governance covers the board of directors, accountability, disclosure, internal controls, stakeholder interests, agency conflicts, corporate social responsibility, codes of conduct and whistleblowing.
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