Final answer:
The board of directors must ensure that common and collective funds are audited annually to maintain corporate governance and accountability.
Step-by-step explanation:
Audit frequency for common and collective funds, as it pertains to the responsibility to the board of directors, is legally required to be done annually. The board of directors plays a crucial role in corporate governance, overseeing the top executives and ensuring accountability within the organization.
Auditing firms are a second key institution in this structure, reviewing the company's financial records to provide assurance that the reported information is reasonable. However, as in the case of Lehman Brothers, there have been historical instances where the governance provided by the board, the auditing firms, and outside investors, such as those holding mutual funds or pension funds, have not prevented the dissemination of misleading financial information.