What is the ideal size for an audit committee as per standard recommendations?

The ideal size for an audit committee, as recommended by many governance and accounting standards, typically falls within the range of five to seven members. This size is often preferred because it strikes a balance between having enough diverse perspectives and expertise while maintaining an effective and manageable level of discussion and decision-making.

Having a committee that is too small may limit the breadth of experience and ideas, while a larger committee could lead to difficulties in coordination and consensus-building. The recommended size also allows for the inclusion of independent members, which is crucial for ensuring objectivity and impartiality in oversight. Committee members should possess relevant financial, operational, and risk management knowledge, and having five to seven members permits a robust set of competencies without overwhelming the committee structure.

Overall, this size has been adopted widely due to its effectiveness in fostering thorough oversight of financial reporting, compliance, and internal controls, which are the primary responsibilities of audit committees.