ACCA Advanced Audit and Assurance (AAA) Practice Exam

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Prepare for the ACCA Advanced Audit and Assurance (AAA) Exam with our quiz. Study multiple choice questions, hints, and explanations to boost your confidence. Excel in your exam!

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How many independent non-executive directors are required on the remuneration committee in larger companies?

Two
Three
Four
Five

The correct answer is: Three

Larger companies are typically required to have at least three independent non-executive directors on their remuneration committee, according to best practices for corporate governance. This is to ensure that the committee operates effectively with appropriate oversight and does not have conflicts of interest, contributing to better decision-making regarding executive remuneration. The presence of a sufficient number of independent non-executive directors helps to reinforce the integrity of the remuneration-setting process, ensuring that decisions regarding pay are made transparently and in the best interest of shareholders. This requirement aligns with guidelines issued by regulatory bodies, emphasizing the importance of independent oversight in managing potential conflicts and promoting fairness in executive compensation.