Question

Audit committees have been identified as a major factor in promoting independence in both internal and...

Audit committees have been identified as a major factor in promoting independence in both internal and external auditors. Which of the following is the most important limitation on the effectiveness of audit committees?

A. Audit committees are composed of independent directors. However, those directors may have close personal friendships with management.

B. Audit committee members are compensated by the organization and thus favor a shareholder's view

C. Audit committees devote most of their efforts to external audit concerns and do not pay much attention to internal auditing and the overall control environment.

D. Audit committee members do not normally have degrees in the accounting or auditing fields.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

ANSWER:

.A .Audit committees are composed of independent directors. However, those directors may have close personal friendships with management.

Independent Directors are appointed by the Management with the approval of shareholders

Independent directors may have close personal friendship with the management.

This is the most important limitation of the Audit Committees

Add a comment
Know the answer?
Add Answer to:
Audit committees have been identified as a major factor in promoting independence in both internal and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • 3) Role of internal audit function 30 Chapter 1: Auditing and Internal Contrel Management ii External...

    3) Role of internal audit function 30 Chapter 1: Auditing and Internal Contrel Management ii External auditor i Internal audit To whom should the Director of Internal Audits report. Explain your answer. Comment on the audit committee member's per- spective as to the committee's current composition. 3. Role of Internal Audit Function Nano Circuits Inc. is a publicly traded company that pro- duces electronic control circuits, which are used in many products. In an effort to comply with SOx, Nano...

  • Every year, the board of directors of Northern Power, a distributor of electricity, commissions an effectiveness...

    Every year, the board of directors of Northern Power, a distributor of electricity, commissions an effectiveness evaluation of its audit committee. An independent consultant with expertise in governance reviews the means by which the audit committee fulfills its responsibilities, as set out in its charter. Specifically, it evaluates how the members of the audit committee: Oversee the quality and reliability of financial reporting and disclosures Understand the key risks facing the organization and the processes management uses to identify, assess,...

  • Task Internal Audit Must Embrace Change or Sink Like a Stone On March 21, 2019 By...

    Task Internal Audit Must Embrace Change or Sink Like a Stone On March 21, 2019 By Jason Mefford Here’s a list of the internal audit challenges that present threats to the profession or cause sleepless nights for some CAEs. While it’s hardly a comprehensive list, it includes some of the changes and trends that we internal auditors simply can’t ignore. Speed of Technology: Changing business models from technological advances are disrupting traditional organizations and just may be the existential threat...

  • Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee

    1. Which of the following matters would an auditor most likely consider to be a significant deficiency to be communicated to the audit committee? A. Management's failure to renegotiate unfavorable long-term purchase commitments.B. Recurring operating losses that may indicate going concern problems.C. Evidence of a lack of objectivity by those responsible for accounting decisions.D. Management's current plans to reduce its ownership equity in the entity. 2. After obtaining an understanding of internal control and arriving at a preliminary assessed level...

  • Operations Brony’s Bikes was incorporated more than 30 years ago to manufacture ten-speed touring bikes. An...

    Operations Brony’s Bikes was incorporated more than 30 years ago to manufacture ten-speed touring bikes. An exercise bike and mountain bikes later added to the product line. Currently, the company manufactures the following products: Grand Prix:   Ten-speed touring bike Phoenix:          Deluxe eighteen-speed racing bike Pike’s Peak:     Twelve-speed mountain bike Himalaya:        Eighteen-speed deluxe mountain bike Waistliner:       Stationary exercise bike All of these products are manufactured in a single facility, which is located in eastern Texas. Derailleurs (front and rear) comprise a...

  • 1. Do you agree with Deloitte's assertion that Adams had no "substantive role" in the 2008...

    1. Do you agree with Deloitte's assertion that Adams had no "substantive role" in the 2008 and 2009 Caesars audits? Defend your answer. 2. The SEC applies a principles-based approach to mitigating the risks that may undercut auditor independence. Identify the four guiding principles applied by the SEC to protect the independence of auditors of public companies. 3. Assume Adams had used his personal funds to finance his gaming activities in the Caesars casino. Under those circumstances, would he have...

  • The discussion: 150 -200 words. Auditing We know that computer security audits are important in business....

    The discussion: 150 -200 words. Auditing We know that computer security audits are important in business. However, let’s think about the types of audits that need to be performed and the frequency of these audits. Create a timeline that occurs during the fiscal year of audits that should occur and “who” should conduct the audits? Are they internal individuals, system administrators, internal accountants, external accountants, or others? Let me start you: (my timeline is wrong but you should use some...

  • CASE 17: WATSON’S AMBULATORY EHR TRANSITION Major theme: System acquisition Primary care physicians play a key...

    CASE 17: WATSON’S AMBULATORY EHR TRANSITION Major theme: System acquisition Primary care physicians play a key role in the U.S. health care delivery system. These providers integrate internal and external information with their clinical knowledge to determine the patient’s treatment options. An effective ambulatory electronic health record (EHR) is critical to supply physicians with the information they need to provide quality care and maximize their efficiency. This case involves the decision-making process to replace an inadequate EHR system in a...

  • Arthur Edward Andersen built his firm, Arthur Andersen & Company, into one of the largest and...

    Arthur Edward Andersen built his firm, Arthur Andersen & Company, into one of the largest and most respected accounting firms in the world through his reputation for honesty and integrity.  “Think straight, talk straight” was his motto and he insisted that his clients adopt that same attitude when preparing and issuing their periodic financial statements.  Arthur Andersen’s auditing philosophy was not rule-based, that is, he did not stress the importance of clients complying with specific accounting rules because in the early days...

  • Please read the attached case: Navistar International and prepare answers to the following four questions In...

    Please read the attached case: Navistar International and prepare answers to the following four questions In a bizarre twist to a bizarre story, on October 22, 2013, Deloitte agreed to pay a $2 million penalty to settle civil charges—brought by the PCAOB—that the firm violated federal audit rules by allowing its former partner to continue participating in the firm’s public company audit practice, even though he had been suspended over other rule violations. The former partner, Christopher Anderson, settled with...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT