US CMA Part 1 · Chapter 5 · Question 8 of 23
Under the Sarbanes-Oxley Act, which body of a listed company is directly responsible for appointing, compensating and overseeing the external auditor?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) The audit committee, composed of independent directors
Explanation
SOX Section 301 makes the audit committee directly responsible for the appointment, compensation and oversight of the external auditor, and requires its members to be independent. This reduces management's ability to influence the auditor.
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