Which of the Following Is a Limitation of SEC Requirements

question 11

Multiple Choice

Which of the following is a limitation of SEC requirements for audit committee membership?

• A)The additional responsibilities make service on the committee less desirable to competent directors.
• B)External auditors are unwilling to report to an independent audit committee.
• C)The audit committee compromises the external auditor's independence.
• D)Only the United Kingdom and the United States require audit committees,putting corporations in these countries at a disadvantage.

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Definitions:

Observability

The degree to which the internal states of a system are accessible to its external observation, often used in context of controlling complex systems.

Ideal Organization

A theoretical or model entity that operates with maximum efficiency, effectiveness, and ethics in achieving its goals.

Decision Makers

Individuals or groups responsible for making choices that affect the outcomes of various strategies and operations within organizations.

Information

Data that has been processed, organized, or structured in a way that adds to its meaning or usefulness for decision-making.