In corporate governance, what is the role of the audit committee?

The audit committee plays a crucial role in corporate governance primarily by overseeing financial reporting and compliance. This committee is responsible for ensuring that the organization adheres to relevant laws, regulations, and financial reporting standards.

One of its key functions is to review and monitor the integrity of the financial statements, ensuring that they present a true and fair view of the company's financial position. The audit committee collaborates closely with internal and external auditors, facilitating communication between these parties, and addressing any concerns related to the accuracy of financial reporting.

In addition to overseeing the financial reporting process, the audit committee also ensures that there are adequate systems of internal control and risk management in place, which helps protect the interests of shareholders and stakeholders by maintaining the organization's integrity and transparency.

The other choices do not align with the primary functions of an audit committee. For instance, managing daily operations is typically the responsibility of the executive management team. Directing company strategy is more aligned with the board of directors or senior management's role. Intervening in executive decisions is not within the purview of the audit committee; rather, its role is to provide oversight and document assurance rather than involve itself directly in management decisions.