Reports of the audit committees in their proxy statements; in the report, the audit committee must state whether the audit committee has:

Question

Options

• Areviewed and discussed the audited financial statements with management
• Bdiscussed with the independent auditors the matters required to be discussed by
• Creceived from the auditors disclosures regarding the auditors' independence required by
• DAll of the above

• A
  6% (2)
• B
  3% (1)
• C
  9% (3)
• D
  81% (26)

Explanation

D is correct because SEC rules require audit committees to address all three elements in their proxy statement reports - none is optional, and omitting any one would render the disclosure incomplete.

A, B, and C are not wrong - they're each genuinely required disclosures. They're "distractors" only in the sense that choosing any single one implies the others aren't required, which is false. The exam is testing whether you recognize the complete mandatory checklist rather than a subset.

Memory tip: Think of the audit committee's three-part proxy report as a "RAD" checklist - Reviewed financials with management, Auditors' independence received, Discussed required matters with auditors. If you can't recall which items are required, default to "all of the above" when every listed item is a legitimate regulatory requirement - the SEC designed these as a unified package, not a menu.

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