Functions of an Audit Committee:

• Financial Reporting and Disclosures: The audit committee is responsible for overseeing the financial reporting risks, ensuring accurate financial information is reported to users, applying appropriate accounting policies, and maintaining an effective financial management system.        (2 marks)
• Oversight over System of Internal Control: The audit committee oversees business policies and practices, ensures the protection of the company’s assets, and provides assurance and a formal forum for communication between the board of directors and senior financial management regarding internal control. (2 marks)
• Risk Management System Review: The audit committee reviews the company’s system of internal control, focusing on financial reporting, fraud prevention, risk assessment, and compliance with regulations. (2 marks)
• Oversight of Management and Audit: The audit committee facilitates the maintenance of the independence of the external auditor, ensures effective communication between the board of directors and the internal and external auditors, provides a structured reporting line for internal audit, and considers significant matters raised during the audit process.        (2 marks)

(4 points @ 2 marks each = 8 marks)