Recently the SEBI has mandated the formation of Audit Committee for Asset Management Company (AMCs) of mutual funds. Briefly explain the Role and Composition of Audit Committee.

Role of Audit Committee of Asset Management Companies (AMCs) The Audit Committee of the AMC shall be responsible for oversight of the financial reporting process, audit process, the company's system of internal controls, and compliance with laws and regulations, and other related processes, with specific reference to the operation of its Mutual Fund business. Composition of Audit Committee of Asset Management Companies (AMCs) The Audit Committee of AMC shall have a minimum of 3 directors as members. At least two-third members of the Audit Committee shall be independent directors of the AMC. If two-third of the total strength results in a fraction, then the higher number after rounding up shall be considered. The members of the Audit Committee will be appointed by the Board of Directors of the AMC. All members of the Audit Committee shall be persons with the ability to read and understand financial statements, and at least one member shall have experience and background in finance and accounts. The Chairperson of the Committee shall be an independent director, with adequate experience in the areas of finance and financial services.