The Audit Committee of an Entity Subject to SEC Regulation

question 55

Multiple Choice

The audit committee of an entity subject to SEC regulation will do all of the following except:

• A) be responsible for agreeing to fee compensation of the independent audit firm.
• B) sign certification of the annual financial statements.
• C) be comprised only of individuals who are not members of management.
• D) approve non-audit services provided by the independent audit firm.
• E) serve as liaison between the board of directors and the independent audit firm.

---

Definitions:

Depreciation

The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value over time.

Tax Rate

The percentage at which an individual or corporation is taxed by the government.

Net Present Value

The calculation of the present value of an investment's expected cash inflows minus the initial investment cost, used to analyze the profitability of a project.

Depreciation Schedule

A document that outlines the reduction in value of an asset over time and how it is allocated as an expense across accounting periods for tax and accounting purposes.