The Effective Committees set of booklets comprises publications on the following committees: investment, buildings and grounds, academic affairs, student affairs, finance, development, trustees, audit, compensation, and executive. It is part of the AGB Board Basics Series. This report describes the primary role of an audit committee. The primary responsibility of the audit committee is to provide oversight of the institution's financial practices, internal controls, financial management, and standards of conduct. Specifically, the committee is responsible for: (1) reviewing and understanding financial statements; (2) assuring the board that the statements reflect the institution's financial condition; (3) determining the adequacy of internal controls, including those established for financial information systems; (4) assuring the board that any significant noncompliance with regulatory matters has been brought to their attention; and (5) ensuring adherence to the institution's conflict-of-interest policy.