The Role of Audit Committees in Enhancing Corporate Governance and Financial Transparency

Abstract

This paper explores the crucial role of audit committees in enhancing corporate governance and financial transparency within organizations. Audit committees serve as a critical safeguard, overseeing financial reporting, internal controls, and the work of external auditors, thereby ensuring accuracy, accountability, and compliance with regulatory standards. By promoting ethical practices, improving investor confidence, and strengthening the independence of the board, audit committees significantly contribute to both corporate governance and financial transparency. Despite their importance, audit committees face challenges such as limited resources, conflicts of interest, and the increasing complexity of financial reporting. This paper discusses these challenges and suggests strategies for improving the effectiveness of audit committees, including enhancing financial literacy, ensuring independent oversight, leveraging technology, and fostering ongoing education. Ultimately, audit committees play an indispensable role in maintaining the integrity of financial information and supporting the long-term sustainability of organizations.