RM&CG_W7_Audit & Remuneration Committees

What is the primary role of the audit committee?

• Setting executive remuneration

• Monitoring the integrity of financial statements

• Developing corporate strategy

• Managing day-to-day company operations

How many independent non-executive directors should an audit committee have in a large company?

• At least one

• At least two

• At least three

• At least four

DEF Ltd. is appointing a new member to its audit committee. Which candidate is most suitable?

• A senior executive with no financial background

• A non-executive director with recent and relevant financial experience

• A long-term employee from the HR department

• The CEO of the company

ABC Ltd. has an audit committee with three independent non-executive directors. The board wants to include the chair of the board in the committee to provide more oversight. Is this appropriate?

• Yes, because the chair of the board has the most experience

• No, because the chair of the board should not be a member of the audit committee

• Yes, but only if the company is small

• No, because the chair of the board is responsible for executive management

Which of the following firms is NOT part of the Big Four audit firms?

• Deloitte

• KPMG

• Goldman Sachs

• Ernst & Young (EY)

The external audit process includes:

• Setting executive bonuses

• Understanding internal controls and risk assessment

• Developing marketing strategies

• Managing employee relations

What is the role of the remuneration committee?

• Setting financial regulations

• Determining executive director remuneration

• Conducting internal audits

• Managing risk assessments

Who should be members of the remuneration committee?

• Executive directors

• Independent non-executive directors

• Shareholders

• External auditors

Which of the following should NOT be included in non-executive directors' remuneration?

• Base salary

• Share options

• Fixed allowances

• Board meeting fees

What should executive directors’ remuneration schemes promote?

• Short-term stock price increases

• Long-term shareholdings aligned with shareholder interests

• High-risk investment strategies

• Unlimited bonus payments