To Enhance the Independence of Both the Internal and External

question 246

Multiple Choice

To enhance the independence of both the internal and external audit functions, audit committees should be composed of:

• A) A rotating subcommittee of the board of directors or its equivalent.
• B) A combination of external members of the board of directors and company officers.
• C) Members from all important constituencies, specifically including representatives from banking, labor, regulatory agencies, shareholders, and officers.
• D) Only external members of the board of directors or other similar oversight committees.

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Definitions:

Random Selection

The process of choosing a sample from a population in such a way that each member has an equal probability of being chosen.

Random Sample

A sample drawn from a population where every member had an equal opportunity to be selected.

Sample Mean

The average of all the values in a sample, used as an estimate of the population mean.

Proportion

A statistical measure that denotes the fraction or percentage of the total that exhibits a particular trait or characteristic.