For many years the financial and accounting community has recognized the importance of the use of audit committees and has endorsed their formation. By now the use of audit committees has become widespread. Independent auditors have become increasingly involved with audit committees and consequently have become familiar with their nature and function.

Required:
a. Describe what an audit committee is.
b. Identify the reasons why audit committees have been formed and are currently in operation.
c. Describe the functions of an audit committee.