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Which of the following Is one of the recommendations made by the National Commission on Fraudulent Financial Reporting (the Treadway Commission) to reduce the probability of fraud in financial reports?
Correct Answer: D
* Treadway Commission Recommendations: * Establishing an independent audit committee is essential for oversight and reducing fraud risk in financial reporting. * Audit committees play a critical role in ensuring the integrity of financial statements. * Analysis of Other Options: * A. Shareholder oversight of hotlines:Not a Treadway Commission recommendation. * B. Compensation committee resources:Not directly related to fraud prevention. * C. Management charter:Unrelated to the recommendations. * Conclusion:Mandatory independent audit committees are a key recommendation to reduce fraud risk.