(a) Main Objective of Corporate Governance
The main objective of corporate governance is to manage a business organization efficiently, effectively, and transparently. This system ensures that companies are directed and controlled to protect the interests of stakeholders, maintain ethical practices, and foster accountability.

(b) Composition and Functions of an Audit Committee

• Composition:
  The Audit Committee consists of an equal number of directors and shareholder representatives, with a maximum of six members.
• Functions:
  1. Ensure that the company’s accounting and reporting policies align with legal and ethical standards.
  2. Review the scope and planning of audit requirements.
  3. Assess the findings on management issues in conjunction with the external auditor and related departmental responses.
  4. Oversee the effectiveness of the company’s accounting and internal control systems.
  5. Advise the board on the appointment, removal, and remuneration of external auditors.
  6. Authorize internal auditors to investigate any activities of concern within the company.

(c) Instances When Corporate Governance May Be Compromised by the Board of Directors

1. Significant equity holdings by some board members.
2. Dominance of the board by insiders.
3. Board members lacking independence.
4. Board members with limited experience in governance roles.
5. Failure of the board and audit committees to convene meetings.
6. Presence of audit committee members unfamiliar with finance or auditing.
7. Absence of an established audit committee.
8. Involvement of top executives in fraudulent activities.