This follows the monitoring role of management, and your committee really serves as the first line to achieve that linkage. Schedule a meeting with the executive director and CFO regarding the sources of support and revenue of the organization from a subjective as well as an objective standpoint. Discuss sources of support and revenue in order to identify any issues addressed, and then document the plan for resolution. It is best to prepare an agenda for your executive sessions.
The most effective internal control is management direction and monitoring. As part of the oversight role, it is important to evaluate the adequacy of the organization’s internal controls, especially the computerized information system controls and security along with the independent auditors and the CAE. Start by review the reports of the internal audit team for all audits completed since the prior audit committee meeting.
Review key internal controls with the CAE and understand how these controls will be tested during the year. Review these plans with the independent auditors to understand their scope with respect to key controls. Consider updates on anything new, or any changes to the internal control system, at every meeting.
Include an evaluation of the procedures for the receipt, retention, and treatment of complaints received by the organization regarding accounting, internal accounting controls, or auditing matters that may be submitted by any party internal or external to the organization. Your committee might wish to review any complaints that have been received, current status, and resolution if one has been reached. Such Whistleblower programs, and the tracking or items report, needs to be submitted directly to your committee.
At the very least, review all complaints that have been received and the status of resolution. Ensure that proper steps are taken to investigate complaints and resolve them in a timely fashion. Be sure to see the original version of each complaint received, no matter the media used to submit. You can discuss with management the status or resolution of each complaint. Maintain a cumulative list of complaints submitted to date to review for patterns for other information that might be observed.
The same goes for your committee it needs to understand the procedures for the confidential, anonymous submission by employees of the organization of concerns regarding questionable accounting or auditing matters. Again, review any submissions that have been received, the current status, and the resolution, if one has been reached. Review an original of each complaint received no matter the media used to submit. Discuss the status of resolution of each complaint. Review a cumulative list of complaints submitted to date to review for their patterns or other observable information.
Review procedures with the CAE and the general counsel for both of these complaint programs. Ensure that proper steps are taken to investigate complaints and resolve timely. Any related significant findings and recommendations of the independent auditors as well as internal audit services, together with management’s responses thereto need to be complied. Report to your board on issues relating to internal controls, with emphasis on management’s ability to override controls and the monitoring and testing relating to this capacity and submit a comprehensive report to the board at an annually specified meeting each and every year.
Be assured that your committee determines all internal control weaknesses are quantified, reviewed, and addressed!
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