Audit Committees Are Perceived to Strengthen the Independence of Auditors

question 29

Multiple Choice

Audit committees are perceived to strengthen the independence of auditors.Which of the following is normally an objective of an audit committee?

• A)Ensuring that the entity operates in the best interests of the shareholders.
• B)Assisting the board of directors to discharge its responsibility to exercise due care, diligence and skill.
• C)Giving advice on the selection of the board of directors.
• D)All are objectives of an audit committee.

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Definitions:

Net Cash Sales

The amount of cash generated from sales transactions, after deducting returns, allowances, and discounts.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit customers by comparing net credit sales to the average accounts receivable.

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods during a certain period. It indicates the efficiency of inventory management.

Cash Inflows

Money that is received by a company from its various business activities, including sales, financing, or investments.