POLICY TYPE: GOVERNANCE PROCESS
POLICY TITLE: AUDIT COMMITTEE JOB DESCRIPTION
The job of the Audit Committee is to assist the Board of Directors with fulfilling its oversight responsibilities with respect to: (1) the audit process and (2) the system of internal controls that the management and the Board of Directors have established. The Committee should have a clear understanding with the outside auditors that they must maintain an open and transparent relationship with the Committee, and that the ultimate accountability of the outside auditors is to the Board of Directors.
The Committee shall consist of four members of the Board of Directors: the Treasurer, the President Elect, the Chair of the Council of Division Presidents, and the Past President. In the year when there is no Past-President there will be only three members. The Treasurer shall serve as the Chair of the Committee for a three-year term, the President Elect shall serve a two-year term, the CDP Chair shall serve a two-year term, and the Past President shall serve a one-year term. Members of the Committee should have: (1) knowledge of the primary activities of the organization, (2) the ability to read and understand the Association’s financial statements, and (3) the ability to understand key operational risks and internal controls.
In carrying out its oversight responsibilities, the committee will:
1) Provide an open avenue of communication between the independent auditor, Executive Director or her/his designee who serves as the primary financial manager, and the Board of Directors.
2) Meet twice annually or more frequently as circumstances require, once prior to the audit and once following the audit. Meetings may be held in person or by telephone conference call. The Committee may ask members of management or others to attend meetings and provide pertinent information, as necessary.
3) Recommend for approval by the Board of Directors the selection, compensation, and discharge of the independent auditor.
4) Confirm and assure the independence of the independent auditor and the objectivity of the Executive Director or her/his designee who serves as the primary financial manager.
5) Instruct the independent auditor that the Board of Directors, as the members’ representative, is the auditor’s client.
6) Review and approve, in consultation with the independent auditor and the Executive Director or her/his designee who serves as the primary financial manager, the audit scope and plan.
7) Review with management and the independent auditor the results of annual audits and related comments including:
a) The audit of AAMFT’s annual financial statements, accompanying footnotes and its report thereon;
b) The management letter;
c) The representation letter from the Executive Director and/or the financial manager certifying the fair representation in all material respects of the financial information;
d) Any significant changes required in the independent auditor’s audit plans;
e) Any difficulties or disputes with management encountered during the course of the audit;
f) Significant findings during the year, including the Status of Previous Audit Recommendations;
g) The adequacy of AAMFT’s internal controls including computerized information system controls, security, and disaster recovery plans;
h) Any changes in accounting principles, including the rationale for such changes and their impact on the financial statements;
i) Review and assess the organization’s system of internal controls for detecting accounting and financial reporting errors and fraudulent activities.
8) Review any disclosures made to the Committee by the Executive Director or her/his designee who serves as the primary financial manager, external auditors or others concerning any significant cases of employee or management conflict of interest, misconduct or fraud.
9) Report periodically to the Board of Directors on significant results of the foregoing activities.
10) Pre-approve any non-auditing functions to be performed by the independent auditor.
11) Review and update the Committee’s Job Description annually.
12) Maintain minutes or other records of meetings and activities of the Committee.
13) Conduct or authorize investigations into matters within the Committee’s scope of responsibilities. The Committee will be empowered to retain independent counsel and other professionals to assist in conducting any investigation.