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An audit committee is an operating committee of a company's board of directors that is in charge of overseeing financial reporting and disclosure.

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An audit committee is an operating committee of a company's board of directors that is in charge of overseeing financial reporting and disclosure.

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As per Section 177 of Companies Act, 2013:

(1) The Board of Directors of every listed company and such other class or classes of companies, as may be prescribed, shall constitute an Audit Committee.(2) The Audit Committee shall consist of a minimum of three directors with independent directors forming a majority: Provided that majority of members of Audit Committee including its Chairperson shall be persons with ability to read and understand, the financial statement. (3) Every Audit Committee of a company existing immediately before the commencement of this Act shall, within one year of such commencement, be reconstituted in accordance with sub-section (2). (4) Every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall, inter alia, include,— (i) the recommendation for appointment, remuneration and terms of appointment of auditors of the company; (ii) review and monitor the auditor‘s independence and performance, and effectiveness of audit process; (iii) examination of the financial statement and the auditors‘ report thereon; (iv) approval or any subsequent modification of transactions of the company with related parties: 1 [Provided that the Audit Committee may make omnibus approval for related party transactions proposed to be entered into by the company subject to such conditions as may be prescribed;] (v) scrutiny of inter-corporate loans and investments; (vi) valuation of undertakings or assets of the company, wherever it is necessary; (vii) evaluation of internal financial controls and risk management systems; (viii) monitoring the end use of funds raised through public offers and related matters. (5) The Audit Committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the company. (6) The Audit Committee shall have authority to investigate into any matter in relation to the items specified in sub-section (4) or referred to it by the Board and for this purpose shall have power to obtain professional advice from external sources and have full access to information contained in the records of the company. (7) The auditors of a company and the key managerial personnel shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor‘s report but shall not have the right to vote. (8) The Board‘s report under sub-section (3) of section 134 shall disclose the composition of an Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, the same shall be disclosed in such report along with the reasons therefor. (9) Every listed company or such class or classes of companies, as may be prescribed, shall establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed. (10) The vigil mechanism under sub-section (9) shall provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases: Provided that the details of establishment of such mechanism shall be disclosed by the company on its website, if any, and in the Board‘s report.

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Audit committee is agroup of independent directors to assist or help the auditors .   The main function  of the audit comittee is to provide information regarding the financial report system as well as internal control and its compliance 

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Hey Ekta,

Board of Directors of a Company functions through help of various Committees. Once such Committee is Audit Committee .The Audit Committee generally recommends to the Board of Directors about the investment of funds, loan procurement options and other financial matters. It can also recommend to the Board which auditor to appoint. Companies Act, 2013 manades the requirement of Audit Committee for certain big Companies.

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Audit committee is a selected number of members of a company board of directors whose

i) respnsibilities include helping auditors remain independent of management.

ii)overseeing the financial reports.

iii)overseeing hiring,performance and independence of external auditors.

iv) discussed risk  management

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An audit committee is an operating committee of a company's board of directors that is in charge of overseeing financial reporting and disclosure. Committee members must be made up of independent outside directors, including a minimum of one person who qualifies as a financial expert. Audit committees maintain communication with the company's chief financial officer (CFO) and controller. Audit committees typically have the authority to initiate special investigations in cases where they determine accounting practices are problematic or suspect, or where problems exist with personnel. The audit committee's role includes the oversight of financial reporting, the monitoring of accounting policies, the oversight of any external auditors, regulatory compliance, and the discussion of risk management policies with management.