Which of the Following Statements Is True of the Audit

question 85

Multiple Choice

Which of the following statements is true of the audit committee mandated by the Sarbanes-Oxley Act?

• A) The members of the audit committee are appointed by the SEC.
• B) A person who receives compensation for any duties from a public corporation cannot be appointed as a member of its audit committee.
• C) All the members of the audit committee must be financial experts by either education or experience.
• D) The audit company is responsible for the appointment of accounting firms to audit the company.

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Definitions:

Group Polarization

In group decision making, the tendency for group members to shift their opinions toward a position that is similar to but more extreme than the positions they held prior to group discussion; both the risky shift and the cautious shift are instances of group polarization.

Risky Shift

In group decision making, the tendency for decisions made in groups after discussion to be riskier than decisions made by individual members prior to discussion.

Risk Avoidant

Characterizes individuals or strategies that prioritize minimizing potential losses or risks.

Justice Principle

The ethical concept that emphasizes fairness and the equitable treatment of individuals in decision-making processes and distribution of resources.