To ensure audit committee independence, the committee should meet separately with each of the following groups except:

• A. Senior executives
• B. Internal auditors
• C. External auditors
• D. Shareholders

Answer: (D)

Independence in the audit committee comes from having candid, private discussions with those who perform and oversee the audits. Meeting separately with internal auditors and external auditors is essential to gauge objectivity, raise concerns freely, and assess the auditors’ independence from management. These private sessions help ensure the committee can oversee the audit process without management influence and with honest feedback from the people conducting the audits.

Meeting separately with senior executives can also occur as part of understanding the control environment and governance processes, but it is not about preserving independence from the audit process. By design, the group that should not have private, separate sessions with the audit committee is shareholders. Shareholders are owners and not a source of the day-to-day audit oversight; private meetings with them could blur accountability and raise concerns about undue influence, undermining the committee’s independence. Therefore, the exception is meeting separately with shareholders.