An Audit Committee Must Be Comprised of Outside Directors and at Least

question 10

Multiple Choice

An audit committee must be comprised of outside directors and at least one outside financial expert.An individual with which of the following characteristics is considered an outside director?

• A)A director who is not a member of management and has no other relationship to the organization.
• B)A consultant to the organization who works as an honorary member of the board.
• C)A director who is also a member of management and has no other relationship to the company.
• D)A director who is a CPA and CIO of an affiliated organization.

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Definitions:

Ringelmann Effect

Describes the tendency for individual members of a group to become increasingly less productive as the size of the group increases.

TAT

The thematic apperception test, a projective psychological test used to reveal a person's social drives or needs by their interpretation of a series of pictures of emotionally ambiguous situations.

Social Loafing

The phenomenon where individuals exert less effort to achieve a goal when they work in a group than when they work alone.

Social Impact Theory

Social impact theory suggests that the amount of influence a person experiences in a group situation depends on the strength, immediacy, and number of other people in the group.