Financial Risk Manager Part 1

Explanation

The correct answer is C because the primary responsibility of an audit committee is to oversee the financial reporting process to ensure accuracy, completeness, and transparency of financial statements and disclosures.

Detailed Analysis:

Why C is correct:

• Audit committees are primarily responsible for financial oversight
• They ensure financial statements are accurate and transparent
• They monitor internal controls and external auditor relationships
• They verify compliance with legal and regulatory requirements

Why A is incorrect:

• Risk identification and assessment is typically handled by risk management teams or committees, not the audit committee

Why B is incorrect:

• Reviewing and approving risk management strategies falls under the purview of senior management or dedicated risk committees

Why D is incorrect:

• Communicating executive compensation decisions is typically handled by human resources or compensation committees

Key Points:

• Audit committees focus on financial reporting integrity
• Risk management responsibilities are separate from audit committee functions
• The audit committee's role is crucial for maintaining stakeholder trust in financial reporting