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The U.S. national stock exchanges require listed companies to have an independent audit committee. To be...

The U.S. national stock exchanges require listed companies to have an independent audit committee. To be independent, audit committee member:

  • A. Can accept compensation for serving as board member
  • B. Can accept consulting fee from the company
  • C. Can accept advisory fee from the company
  • D. None of the above
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Answer #1

Correct Answer : D. None of the above.

Reason : An Independent Audit Committe cannot accept any compensation, consultation fee or advisory fee form the company as it can harm the independent opinon of the audit committe. An audit committee is required to form unbias opinion and accepting any of such compensations or fees would impact the opinion. Therefore, such activities are not allowed.

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