【正确答案】Benefits of audit committee for Bluebird Enterprises Co Appointing an audit committee will benefit Bluebird in the following ways: – Bluebird does not currently have any non-executive directors, hence once appointed, they will bring considerable external experience to the board as well as challenging the decisions of executive directors and contributing to independent judgements. – The finance director will benefit in that he will be able to raise concerns and discuss accounting issues with the audit committee. – It will help to improve the quality of the financial reporting of Bluebird; whilst the company already has a finance director,the audit committee will assist by reviewing the financial statements. – The establishment of an audit committee can help to improve the internal control environment of the company. The audit committee is able to devote more time and attention to areas such as internal controls. – If Bluebird has an internal audit (IA) department, then establishing an audit committee will also improve the independence of IA. – The audit committee can also provide advice on risk management to the executive directors. They can create a climate of discipline and control and reduce the opportunity for fraud, and increase public confidence in the credibility and objectivity of the financial statements. – The audit committee will assume responsibility for appointing and liaising with the external audit firm, thus ensuring the independence of the external auditor especially in cases of dispute with management.

【正确答案】Advantages and disadvantages of potential non-executive directors (NEDs) Advantages (i) Antony Goldfinch already has experience of being a NED for another company and he has sat on an audit committee,hence he will be familiar with what the role entails and will be able to bring experience of being a NED to Bluebird. In addition, Antony Goldfinch has indicated he is agreeable to being paid a fixed fee which is not profit related; this is important as an independent NED’s remuneration should be unrelated to the performance of the company. (ii) Jacob Mallard is currently a finance director and so he possesses recent and relevant financial experience which is required for at least one member of the audit committee. In addition, he operates in the retail industry and so would be aware of key issues facing companies like Bluebird and so would have an appropriate mix of experience and knowledge. Disadvantages (i) Appointing Antony Goldfinch as a NED has disadvantages as he works for a banking company and so would not have relevant experience of companies such as Bluebird; hence he could lack the critical skills and relevant experience needed to provide meaningful advice to the executive directors. In addition, Antony Goldfinch is already an executive director for a large multinational company and a NED for another company; it might be difficult for him to devote sufficient time to his role at Bluebird. (ii) Jacob Mallard is the brother of the chief executive and therefore he is not an independent NED. He might be inclined to agree with the chief executive as he is his brother rather than providing the level of objective judgement required from a NED. Also he wants a contract as a NED for a period of seven years; all directors including NEDs must be subject to re-election at regular intervals not exceeding three years.