QS Study

Requirements of Audit Committee

The audit committee is a subcommittee of the board of directors that is responsible for the financial reporting and disclosure process. Committee members are drawn from members of the company’s board of directors, with a Chairperson selected from among the committee members. Audit committee means a group of at least 3 individuals responsible for overseeing all internal and external audit functions of a company.

The requirement of audit committee:

The audit committee has the following requirement –

  • Each member of the audit committee shall be the member of the board of directors and shall be independent.
  • The audit committee is directly responsible for the appointment compensation and over side of work any register public accountant firm on employed by the company.
  • The audit committee must pre-approve all audit and not audit service provided by its auditor.
  • The audit committee must establish some procedure received by the company.
  • Each audit committee member must have the authority to engage independent counsel.