As a result of the Sarbanes-Oxley Act of 2002, much greater emphasis has been placed on audit committees and their responsibilities than was in the past. Public companies are required to have an audit committee as a subset of its board of directors. Thus, the presence of audit committees has become more widespread and their roles have increased significantly. Accordingly, auditing firms for public companies have become more involved with their clients’ audit committees.

Required:
a. What is an audit committee?
b. Why are audit committees formed and what function do they serve?
c. What are an auditor’s responsibilities with regard to communicating with the client company’s audit committee?