The Brazilian Audit Committee

Overview of the Audit Committee The Audit Committee is a subcommittee of the Board of Directors that oversees the Company's financial reporting process, including audit procedures. In general, the role of the Audit Committee is to oversee the financial reporting process, oversee the internal control system, and oversee internal audits and independent public accounting functions (Doupnik and Perera, 2012). Another requirement for listed companies in the United States is that the committee must consist of independent directors. That is, no member of the committee can work in the company.

Audit committee alone is not enough. The Audit Committee is vigilant, informative, hardworking and must strive to carry out its supervisory work. Of course, the Audit Committee must avoid unnecessary or inappropriate intervention by the company's privileges, but negligence must be effective. As mentioned above, 69% of companies involved in the execution of illegal financial reports by the Securities and Exchange Commission have established an Audit Committee. This statistic raises questions as to whether the Audit Committee is exploiting its possibilities to reduce the incidence of fraudulent financial reporting. The Board's review has revealed significant differences in the effectiveness of the Audit Committee, the functions performed, and the manner in which it is carried out. All of these add doubt

In order to implement the committee recommendation that all listed companies have independent audit committees, SEC rules are required. The US Securities and Exchange Commission has long recognized the importance of the Independent Audit Committee for the completeness of financial reporting. However, the US Securities and Exchange Commission postponed the policies and practices of the New York Stock Exchange (NYSE) and other self-regulatory bodies (SRO). All subregional offices are considering this issue, but only the New York Stock Exchange requires that an audit committee is established consisting of only independent directors in all listed companies. The National Association of Securities Dealers (NASD) recently demanded that all domestic market system companies set up and maintain an audit committee with the majority of independent directors. The European Commission admired the US Securities and Exchange Commission that it did not want to enforce unnecessary direct government regulations but the experience of the Independent Audit Committee is that the time has come for the US Securities and Exchange Commission to take direct action Respectively.