As Generally Conceived, the Audit Committee of a Publicly Held

question 35

Multiple Choice

As generally conceived, the audit committee of a publicly held company should be made up of:

• A)representatives of the major equity interests (preferred stock, common stock).
• B)the audit partner, the chief financial officer, the legal counsel, and at least one outsider.
• C)representatives from the client's management, investors, suppliers, and customers.
• D)members of the board of directors who are not officers or employees.

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Definitions:

LIFO Method

Last In, First Out, an inventory valuation method that assumes goods purchased last are the first to be sold.

Fiscal Year

A one-year period used for financial reporting and budgeting that may not correspond to the calendar year.

Net Realizable Value

The estimated selling price of goods, minus the cost of their sale or completion.

Dollar-Value LIFO

An inventory valuation method that uses the last-in-first-out (LIFO) principle, adjusted for changes in the dollar's value.