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The audit engagement partner has assessed the make-up of the audit committee. Which of the following would be valid conclusions from this assessment?
(1)
(2)
It is acceptable for the chairman to chair the audit committee.
A new member of the audit committee with relevant financial experience must be recruited.
Answer – 2 only
Can you please help why 2nd statement is true. It says that relevant financial experience. I have studied that one NED in Audit committee should be from any professional body. Does these both mean same?Please do try and give your posts a relevant title that will help other students using the search function – when asking about a particular past Q, please give its name and the date of the exam session.
If you look at the top of page 15 of the notes about the composition of the audit committee:
? the chair of the board should not be a member;
? at least one member must have recent and relevant financial experience;I don’t know where you are reading otherwise but the Code does not specify that anyone on an audit committee needs to be a member of a professional body.
Experience is not the same as qualification – indeed, someone could have sufficient relevant experience without a formal qualification, though in this day and age one might expect this person to have a recognised professional qualification.
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