Which of the following statements about environmental issues is least likely to challenge the effectiveness of the audit committee?

The statement that the audit committee being composed entirely of finance experts is the least likely to challenge its effectiveness makes sense because having expertise in finance is generally essential for the audit committee’s primary role, which is to oversee the financial reporting process, internal controls, and the audit function. The effectiveness of the audit committee relies on its understanding of financial statements and financial regulations, rather than on specialized knowledge in environmental issues.

In contrast, full awareness among directors about environmental impacts, regular engagement with regulatory agencies, and prioritization of sustainability in strategic discussions can all present challenges. For instance, if directors lack full information about environmental impacts, they may miss important risks and opportunities relevant to the company's financial health. Engaging with regulatory agencies can provide essential insights but can also complicate relationships and compliance efforts. Similarly, a focus on sustainability could lead to conflicting priorities if not balanced with financial considerations. Therefore, while finance expertise is critical, it does not inherently create a challenge to the audit committee’s effectiveness in the way that the other statements potentially do.