A financial services organization's board is assessing increased regulations and its effect on current industry lending practices. Which of the following committees would help the board identify and…

Question

Options

• AQuality committee.
• BAudit committee.
• CRisk committee.
• DGovernance committee.

• A
  3% (1)
• B
  84% (32)
• C
  5% (2)
• D
  8% (3)

Explanation

The Audit committee is responsible for overseeing an organization's compliance with laws and regulations, making it the appropriate body to identify and assess how increased regulations affect lending practices - this falls squarely within its mandate to monitor regulatory changes and ensure the organization understands its compliance obligations.

The Risk committee (C) manages and monitors the organization's overall risk exposure but typically acts on risks already identified, rather than serving as the primary body for assessing specific regulatory compliance impacts. The Governance committee (D) focuses on board structure, director nominations, and corporate governance frameworks - not operational regulatory effects. The Quality committee (A) is generally focused on process quality and standards, which is unrelated to regulatory assessment in this context.

Memory tip: Think "Audit = Accountability to regulations" - the audit committee is the board's watchdog for compliance, so whenever a question involves laws, regulations, or their effects on business practices, the audit committee is the go-to body.

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