The audit committee is a subset of the board focused on numbers you can trust. It reviews financial statements, probes internal audit findings, watches related party risks, and recommends or oversees the external auditor. Good committees ask hard questions before reports go public.
Key takeaways
- Members ideally include people who understand accounting and controls.
- It is a governance safeguard, not a substitute for honest management.
- Whistleblowing channels and internal audit often report through this committee.
- Investors should read audit committee reports and auditor opinions in the annual package.