Which of the Following Rules Governing a Firm's Audit Committee

question 39

Multiple Choice

Which of the following rules governing a firm's audit committee did the Sarbanes-Oxley Act of 2002 institute?

• A)At least 50% of the membership of the audit committee must consist of independent directors.
• B)The selection of the company's auditors must be made by the firm's board of directors.
• C)All of the members of the audit committee must have either accounting or finance degrees.
• D)At least one member of the audit committee must be a financial expert, and that member must be clearly identified.

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Definitions:

Base Year

A reference year used for comparative analysis, often in calculating economic indicators like indexes.

Absolute Change

The difference between the final value and the initial value of a quantity, without regard to the direction of change.

Price Level

A summary average of current prices for the full spectrum of goods and services in the economy.

Consumer Price Index

An index of the variation in prices paid by typical consumers for retail goods and other items.