Audit and Assurance Practice Exam 2025 – Complete Prep Resource

The primary role of the audit committee is to oversee the financial reporting process and the independent auditors. This includes ensuring the integrity of financial statements and compliance with legal and regulatory requirements. The committee plays a critical role in maintaining stakeholder confidence in the reported financial information. By overseeing the audit process, the committee ensures that the external auditors can conduct their work independently and effectively, providing an objective evaluation of the financial statements.

This oversight typically involves the establishment of procedures to handle complaints regarding accounting, internal controls, and auditing matters, as well as discussions regarding the adequacy of internal controls and risk management practices. The audit committee also serves as a liaison between the board of directors and the auditors, fostering transparency and communication regarding financial reporting and audit findings.

The other options highlight tasks or roles that do not align with the core responsibilities of an audit committee. Preparing financial statements is not within the committee's jurisdiction, as this is typically handled by the management team. Similarly, direct operational management falls outside its purview, as the audit committee is not involved in day-to-day operations but rather focuses on oversight. Expanding auditing standards is also not a role of the audit committee; instead, it should apply existing standards and ensure compliance, rather than altering them.