Final answer:
SOX requires the audit committee of a publicly traded company to have independent directors with at least one being a CPA. This ensures that there is expertise in accounting matters, enhancing the oversight of financial reporting.
Step-by-step explanation:
The question is referring to the requirements set by the Sarbanes-Oxley Act (SOX) regarding the composition of an audit committee for publicly traded companies. SOX mandates that the audit committee must include independent directors who are not employees of the company, and at least one member of the committee must be a CPA (Certified Public Accountant). The correct answer to the student's question is d) CPA.
Having a CPA on the audit committee is crucial because this individual possesses the relevant accounting expertise to understand and supervise the financial reporting process of the company, hence contributing to the integrity and accuracy of the financial statements, which are essential for investor confidence and the proper functioning of the capital markets.