Business Glossary

body formed by a company's board of directors to oversee audit operations and circumstances. It selects and appraises the performance of the CPA firm. In accordance with Securities and Exchange Commission (SEC) regulation, the Committee must be composed of outside directors. Besides evaluating external audit reports, the Committee may evaluate internal audit reports as well. Management representations under the realm of the foreign corrupt practices act are also reviewed. The Committee may also get involved with public disclosure of corporate activities.