What is the main function of an audit committee?

The primary function of an audit committee is to support the board of directors by providing independent assessments of the organization's financial reporting processes, internal controls, compliance with legal and regulatory requirements, and the overall risk management practices. This committee plays a crucial role in enhancing the integrity of financial statements and ensuring accurate reporting, thereby fostering stakeholder confidence.

By functioning independently from the management of the organization, the audit committee is tasked with overseeing the audit process, selecting auditors, and facilitating communication between auditors and the board. This independence is critical, as it allows the committee to freely assess the financial practices and controls without undue influence from the management team, ensuring that findings and recommendations can be made objectively.

This focus on independent assessments distinguishes the audit committee's role from operational guidance, compliance measures, or financial investment management, which are not the primary responsibilities of this committee. While other options may involve aspects of governance, they do not encapsulate the core purpose of the audit committee as clearly as providing independent assessments does.