What is the role of the Audit Committee in governance?

• A. Oversees financial reporting, internal controls, risk management, and auditor independence; reports to the board
• B. Ensures vendor compliance with service level agreements
• C. Manages internal IT help desk operations
• D. Develops corporate branding strategy

Answer: (A)

The role of the Audit Committee in governance is to provide independent oversight of the organization's financial reporting and control environment, risk management, and the independence and work quality of external auditors, reporting findings and recommendations to the board.

This committee acts as a bridge between management, internal auditors, and external auditors to ensure the integrity of financial statements and the effectiveness of controls. It monitors the procedures that produce financial reports, reviews significant accounting judgments, and oversees processes that manage risk and compliance. By supervising the external audit and ensuring auditor independence, the committee helps the board receive an objective assessment of financial health and control weaknesses, and it follows up on remediation actions.

Those other functions—ensuring vendor compliance with service level agreements, managing internal IT help desk operations, or developing corporate branding strategy—fall outside the Audit Committee’s governance remit. They align with operational, IT, and marketing/strategy areas, respectively, rather than with the board’s oversight of financial integrity and risk.