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CIMA Exam CIMAPRA19-E02-1 Topic 5 Question 98 Discussion

Actual exam question for CIMA's CIMAPRA19-E02-1 exam
Question #: 98
Topic #: 5
[All CIMAPRA19-E02-1 Questions]

In preparation for listing on the UK stock market a company has started to set up the various committees needed to comply with the UK Corporate Governance Code.

Ithasidentified the need for an Audit Committee and haslisted thecharacteristics below but are not sure if they are all correct.

Which of the options below is NOT a characteristic of the Audit Committee?

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Suggested Answer: C

by Taryn at Sep 15, 2024, 01:20 AM

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Jennie
10 months ago
The audit committee needs to be made up of a majority of non-executive directors to ensure their independence. That's a key principle of good corporate governance.
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Richelle
9 months ago
D) Recommends appointment and removal of external auditors
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Loren
9 months ago
C) Comprises of a majority of non-executive directors
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Hayley
9 months ago
B) Comprises of non-executive directors
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Alita
10 months ago
A) Sets the external audit fee
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Timothy
10 months ago
Haha, I bet the company's finance team wishes they could set the audit fee. 'Sorry, we're a little short this quarter. How about half-price?'
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Jeannine
10 months ago
I'm surprised that option A is even on the list. Isn't that a basic no-no for corporate governance?
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Mollie
10 months ago
C) Comprises of a majority of non-executive directors
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Paris
10 months ago
B) Comprises of non-executive directors
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Rodolfo
10 months ago
A) Sets the external audit fee
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Kiley
10 months ago
Yup, I agree. The audit committee should be independent of the company's management, so they can provide objective oversight.
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Yuriko
10 months ago
C) Comprises of a majority of non-executive directors
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Wilda
10 months ago
B) Comprises of non-executive directors
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Jodi
10 months ago
A) Sets the external audit fee
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Dianne
11 months ago
I also think option A is the correct answer. The Audit Committee recommends the appointment and removal of external auditors.
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Alva
11 months ago
I agree with Sophia. The Audit Committee does not set the external audit fee.
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Sophia
11 months ago
I think option A is NOT a characteristic of the Audit Committee.
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Laurel
11 months ago
The audit committee should not be setting the external audit fee. That's a clear conflict of interest!
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Adell
10 months ago
D) Recommends appointment and removal of external auditors
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Omer
10 months ago
C) Comprises of a majority of non-executive directors
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Tennie
10 months ago
B) Comprises of non-executive directors
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Graciela
11 months ago
A) Sets the external audit fee
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