- Accurate financial reporting is critical for the efficiency of capital markets and the proper valuation of securities.
- It allows the board and investors to make an informed evaluation of strategy, business model, and risk.
- It also allows the board to structure compensation packages appropriately and award performance-based compensation knowing that predetermined targets were met.
- It is the role of the audit committee to help to ensure the accuracy of reports:1.Sets parameters for quality, transparency, and controls. 2.Hires external auditor to test for misstatement.
For more read see the entire presentation in the above link.