Question
ABC Ltd recently established an audit committee in compliance with the Australian Stock Exchange listing requirements. The committee is made up of Ian Wright, John Small and Todd Smith. Ian is an executive of the company and has worked his way up from a factory worker through to management. Ian is the chairperson of the audit committee. John is not a member of management and is therefore a non-executive director but he does serve on a number of boards. John's background is in accounting and before he became a director he was the CFO of a large corporation for many years. Todd is the chairperson of the board of directors and is an executive of the company. Todd's background is in manufacturing and he has been with the current company for 5 years. The committee has just completed having its formal charter drawn up which details its rights and responsibilities.
Identify the strengths and weaknesses of ABC Ltd's audit committee.