As Generally Conceived,the Audit Committee of a Publicly Held Company

question 29

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.

---

Definitions:

Affect Heuristic

The reliance on instinct instead of analysis in making decisions.

Endowment Effect

A cognitive bias in which individuals value an owned object higher than its market value, simply because they own it.

Affect Heuristic

A mental shortcut that influences decision-making based on emotions and feelings.

Street Smarts

Practical knowledge and experience in dealing with everyday situations or challenges, often contrasted with book learning.