Its principal functions are to:

• monitor the periodic reviews of the accounting and financial reporting processes, corporate best practice and systems of internal control that are conducted by the company’s independent auditors, financial and senior management and internal auditing department(if the company has one); and
• review and evaluate the independence and performance of the company’s independent auditors.

In performing these oversight functions, the Board and audit committee should seek to oversee the adoption of quality accounting policies and internal controls, and hire effective independent auditors, in order to deter fraud, anticipate financial risks and promote accurate, timely and meaningful disclosure of financial and other information to the Board, the public and the SEC.

Each company faces its own unique circumstances, so each audit committee should tailor its best practices to address those circumstances.