Final answer:
Audit Committees are expected to take a more focused role in overseeing risk management and internal control as part of corporate governance, working to ensure the integrity of financial reporting and compliance with legal standards.
Step-by-step explanation:
The entities that are expected to take a more focused overseeing role in respect to risk management and internal control are Audit Committees. Audit committees are part of a company's board of directors and are primarily responsible for overseeing financial reporting and disclosure. To ensure accuracy in reporting, they supervise the efficacy of the company's internal controls, the integrity of financial statements, compliance with legal and regulatory requirements, and the qualifications and independence of the internal and external auditors.
In the context of corporate governance, the board of directors acts as the first line of oversight, while auditing firms provide an additional layer of assurance by reviewing financial records. Large shareholders can influence corporate governance through their investment decisions, as they have a vested interest in the company's well-being. However, when governance structures like these fail, as was the case with Lehman Brothers, investors and other stakeholders may not receive accurate financial information regarding the company's operations.