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Simple English definitions for legal terms
audit committee
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A quick definition of audit committee:
An audit committee is a group of people who are responsible for making sure a company's financial reports are accurate and truthful. They oversee the work of the company's auditors and make sure that the company is following all the rules and regulations related to financial reporting. The committee is made up of members of the company's board of directors and must be independent from the company to ensure that they are unbiased in their work. Public companies are required to have an audit committee by law.
A more thorough explanation:
The audit committee is a group of people who are part of a company's board of directors. They are responsible for making sure that the company's financial reports are accurate and that the company's auditors are doing their job properly.
For example, if a company's financial statements show that they made a lot of money, the audit committee would check to make sure that the numbers are correct and that the company is not hiding anything. They would also make sure that the company's auditors are independent and not influenced by the company's management.
The audit committee is required by law for public companies in the United States. This means that companies that want to sell their stock to the public must have an audit committee. The audit committee is regulated by the Securities and Exchange Commission (SEC) and must follow certain rules to ensure that they are doing their job properly.