Explain the role of the board's Audit Committee.

• A. Oversees financial reporting, internal controls, external audits, regulatory compliance; provides independent oversight of risk and governance.
• B. Manages daily IT operations and incident response.
• C. Sets business strategy and objectives.
• D. Approves all hiring and compensation.

Answer: (A)

The role of the Audit Committee is independent oversight of financial reporting and governance. It focuses on the integrity of financial statements, the effectiveness of internal controls and risk management, and the independence and work quality of external auditors. By reviewing significant accounting policies and judgments, monitoring internal control systems, and ensuring regulatory compliance, the committee provides objective oversight that supports accurate reporting and reliable governance. It also serves as a bridge between management, internal audit, and external auditors, challenging findings when needed and ensuring issues are addressed. This is distinct from day-to-day IT operations, strategic planning, or hiring and compensation decisions, which fall outside the committee’s formal remit.