Certified Government Financial Manager (CGFM) 2026 – 400 Free Practice Questions to Pass the Exam

A key indicator of a strong audit committee is its independence and objectivity. An effective audit committee plays a crucial role in overseeing the financial reporting process, internal controls, and the audit function of an organization. Independence ensures that the members of the audit committee can engage in unbiased evaluations of management's practices and decisions, as well as financial statements. This objectivity is essential for maintaining the integrity of the audit process and for instilling confidence in stakeholders regarding the transparency and accuracy of financial reporting.

In a strong audit committee, independence enables members to challenge management when necessary and to provide honest feedback without the influence of internal politics or pressures. This sets a tone at the top that promotes ethical behavior and rigorous scrutiny of financial practices, which is vital for a robust internal control environment.

The presence of independence and objectivity reflects a commitment to the principles of accountability and ethical governance, both of which are essential for the overall health of an organization's internal control framework.