earticle

영어

Management is responsible for fair presentation of financial reporting, but often commits intentional misrepresentations or deceptions due to certain environmental, institutional, or personal desire. Fraudulent financial reporting detriments not only those involved but the stability of the nation's economy, leading to shake up or even collapse of the securities market. The board of directors delegates responsibilities for overseeing and monitoring financial reporting process to the audit committee which, in turn, helps the board discharge its duties effectively by providing accounting information. But for the committee to perform its perceived responsibilities well, it must be composed of truly independent members. The inclusion of "grey area" members to the committee may compromise its independence and ,thereby, reduces effectiveness of the audit committee as a monitoring mechanism for management actions. In addition, duties of the committee along with membership requirement, terms of office, frequency and timing of meeting must be spelled out in the charter.