1. The Audit Committee of a publicly traded company is comprised of three member
ID: 2581258 • Letter: 1
Question
1. The Audit Committee of a publicly traded company is comprised of three members. One of the members is a retired Chief Financial Officer of a global bank headquartered in New York. She has extensive experience in managerial finance. How- ever, she is not a CPA and never has worked in accounting or auditing.
The other two members of the Audit Committee inherited shares of stock in the corporation from their parents and have no experience in corporate management or accounting. These two members each own 7% of the corporation’s stock.
Does this corporation’s Audit Committee comply with SOX? Explain?
Explanation / Answer
As per Sarbans Oxley act ,2002
An Audit committee should consist of minimum of 3 board of directors and maximum should be the Independent Directors, of which minimum one director should be financial expert.
so in this current case they are 3 members in a publicly traded company of which one member is a retired chief financial Officer of a global bank headquartered in new york so he is Eligible
Other two members have shares in the corporation as per the act Independent directors mean they should have any interest with the corporation as the other two members have interest in the corporation
This corpoation's Audt Committee does'nt comply With SOX
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