Your board’s audit committee is a first line of defense against fraud. But to be effective, committee members need to do more than simply review financial statements and audit results. Members should also adopt the following best practices: Conduct risk assessments. Identify the types of risks faced by your company and their likelihood of occurrence. These assessments should include an evaluation of existing internal controls. Be knowledgeable. Become familiar with relevant accounting issues and recent developments. Also ask questions and challenge management on the accounting for complex transactions. If your company’s industry has specialized accounting rules, consider consulting outside specialists. Communicate with external auditors. Regularly touch base with outside auditors, because the external audit team performs many fraud prevention functions. Schedule formal meetings before the audit to elicit input...