ACCA Audit and Assurance (F8) Practice Exam

How often should the Audit Committee meet to ensure effective oversight?

1. Annually

2. Monthly

3. Quarterly

4. Weekly

The correct answer is: Quarterly

The recommendation for the Audit Committee to meet quarterly reflects a balance between effective oversight and practical considerations. Quarterly meetings allow the committee to stay updated on the financial reporting process, internal controls, risks, and audit plans. This frequency ensures that any significant issues can be identified and addressed in a timely manner without becoming burdensome for members, who often hold other responsibilities. Meeting annually would likely be too infrequent to address ongoing risks and ensure that the oversight process remains robust. Monthly meetings, while providing frequent oversight, could hinder the committee's effectiveness due to meeting fatigue and the challenge of adequately preparing for meetings with such regularity. Weekly meetings would usually be excessive for most organizations and could detract from the focus and depth of discussion that quarterly meetings can provide. Thus, the quarterly meeting schedule aligns with best practices in governance, ensuring that the Audit Committee remains actively engaged while also being practical and manageable.