Audit Committee Toolkit

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Audit committee member toolkit
June 2009

Table of contents

Audit committee charter
Example audit committee charter ..............................................................................................................................1

Audit committee report
Example report of the audit committee ....................................................................................................................11

Financial expertise
Audit committee financial expert questionnaire .......................................................................................................14

Meetings
Example audit committee meeting planner .............................................................................................................20

Orientation of new members
Background information for new committee members............................................................................................28

Oversight of auditors
Matters for consideration regarding audit results ....................................................................................................31 Matters for consideration regarding audit scope .....................................................................................................34 Matters for consideration regarding the internal audit function ...............................................................................37 Matters to consider when selecting or evaluating independent registered public accountants .............................39 Private session with the auditors..............................................................................................................................40

Review of financial information
Questions related to review of financial statements ................................................................................................43 Topics for consideration for quarterly discussions...................................................................................................48

Risk and control matters
Consideration of internal control at the entity level ..................................................................................................51 External environmental factor considerations..........................................................................................................55 Matters for consideration related to internal control ................................................................................................60 Matters for consideration related to fraud risks........................................................................................................63 Matters for consideration related to the corporate compliance and ethics program ..............................................68

Self-assessment
Self-assessment tool for audit committees ..............................................................................................................71

© 2009 Ernst & Young LLP. All rights reserved.

Audit committee member toolkit

i

Audit committee charter

© 2009 Ernst & Young LLP. All rights reserved.

Audit committee member toolkit

i

June 2009

Example audit committee charter

Note: This Example Audit Committee Charter considers the Audit Committee requirements adopted by the SEC in Exchange Act Rule 10A-3, pursuant to Section 301 of the Sarbanes-Oxley Act of 2002 and the listing standards of the NYSE, NASDAQ, and AMEX. The listing standards of the securities exchanges require that Audit Committees have a written charter. This Example Audit Committee Charter addresses the significant duties and responsibilities of the Committee, and incorporates elements of the Audit Committee responsibilities and requirements included in the listing standards of the various exchanges. Companies are encouraged to obtain the advice and input of their legal counsel in reviewing the Audit Committee Charter and tailor...
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