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The video discusses the internal audit function within companies, highlighting the necessity of an Audit Committee composed of board members. Typically, this committee consists of three members, as this is a common practice. The Sarbanes-Oxley Act requires that committee members cannot be employees of the organization, meaning that the CEO, despite being on the board, cannot serve on the Audit Committee. This committee holds a fiduciary responsibility towards shareholders and outside interests, acting as a check and balance between management and both internal and external auditors. Internal audit functions report directly to the Audit Committee, facilitating direct interaction with internal auditors.
