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The internal audit function of a company involves an audit committee comprised of board members, typically with three members being the standard. According to SOX regulations, audit committee members must be outsiders, meaning they cannot be employees of the organization; hence, the CEO cannot serve on the committee. The audit committee has a fiduciary responsibility to the shareholders and other external stakeholders, acting as a check and balance between the auditors (internal or external) and management. The committee interacts directly with internal auditors, who report directly to them, ensuring oversight and accountability.
