I am using Becker for my BEC preparation.

Could someone explain to me on page 3 Audit Committee. It says the following:

Audit committee members are to be members of the issuers board of directors but are to be otherwise independent. What does that mean?

I listened to the becker audio and he said:" they cannot receive any other compensation from that issuer". What does that mean?

Thank you,

Audit committee members cannot actively manage the business. They are to act solely in an effort to manage the relationship with the external auditors and also oversee the internal audit function.

They can receive compensation for aforementioned activities but CANNOT be compensated for any other function. Otherwise, independence is said to be "impaired."

Hope that helps...I am learning this stuff too.

Thank you for your clarification. It is clear now.