The Audit Committee advises and assists the Council and Finance Committee in their oversight responsibilities by monitoring the overall system of internal controls, integrity of financial statements, compliance with applicable laws and regulations, and performance of external auditors.
Roles and Responsibilities
- Discuss the previous year's retirement plan and financial audits and scope of the upcoming audits
- Meet annually with SfN's auditors to review the audit report, including financial statements, the auditors' management letter, and SfN's response to audit report
- Monitor prior audit recommendations and financial management best practices
- Present current audit report to Finance Committee and Council at the annual meeting
The Audit Committee shall advise and assist the Council and Finance Committee of the Society for Neuroscience in fulfilling their oversight responsibilities by monitoring the overall system of internal control, the integrity of the financial statements, the Society's compliance with all applicable laws and regulations, and the independence and performance of SfN's external auditors.
- Annual Financial Statements
- Pay particular attention to complex and/or unusual transactions
- Focus on judgmental areas such as those involving valuation of assets and liabilities and commitments and contingencies
- Meet with management and the external auditors to review the annual financial statements and the results of the audit
- Consider management's response to proposed audit adjustments and internal control issues identified by the external auditors
- Review the year-end financial statements before their release and consider whether the information is adequate and consistent with members' knowledge about SfN and its operations
- Ensure that the external auditors communicate certain required matters to the committee
- Compliance with Legal and Regulatory Requirements
- Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management's investigation and follow up (including disciplinary action) on fraudulent acts or accounting irregularities
- Obtain updates annually from management and general counsel regarding compliance, either in written or verbal form
- Be satisfied that all regulatory compliance matters have been considered in the preparation of the financial statements
- Review the findings of any examinations by regulatory agencies
- Review retirement plan investment offerings and ensure that management holds appropriate periodic assessments of plan offerings and fees to fulfill fiduciary and regulatory compliance requirements
- Independence and Performance of the External Auditors
- Review the external auditors' proposed audit scope, approach, and fees
- Review with the external auditor any problems they may have encountered performing the audit, any management letter provided, and SfN's response to that letter
- Overall Systems of Internal Control and Risk Mitigation
- Meet periodically with management to review the Society's major financial risk exposures and the steps management has taken to monitor and control such exposures
- Gain an understanding from auditors and management as to whether internal control recommendations identified by external auditors have been implemented by management, if appropriate
- Inquire as to the extent to which external auditors review computer systems and applications, the security of such systems and applications, and the contingency plan for processing financial information in the event of a systems breakdown
- Ensure that significant findings and recommendations made by the internal and external auditors are received and addressed on a timely basis
- Review, with general counsel, any legal matters that a could have a significant impact on the SfN's financial statements
- Review the policies and procedures in effect for considering officers' expenses and prerequisites
- Perform other oversight functions as requested by the Executive or Finance Committees or Council
- Monitor the adequacy of policies and practices on conflicts of interest for employees and members of Council
- Ask the internal auditors to inquire as to any possible areas of noncompliance with laws and to perform relevant procedures where appropriate
- Ask the external auditors to perform any procedures required by Generally Accepted Auditing Standards (GAAS) related to compliance with laws and to communicate the related results and knowledge of any noncompliance to the Committee
- Review and confirm the independence of the external auditors by pre-approving any non-audit services provided and related fees, and by obtaining the auditors' assertion of independence in accordance with professional standards
- Ensure that the external auditors communicate certain required matters to the Committee
- Ask that the external auditors keep the Audit Committee informed about fraud, illegal acts, deficiencies in internal control, and certain other matters
- Institute special investigations if necessary, and, if appropriate, retain legal, accounting, or other consultants to advise the Committee
- Receive and investigate any complaints filed under the Society's Whistleblower Policy in accordance with the terms of the policy, including but not limited to the receipt of complaints and reporting to the President and Executive Committee
Generate Policy Recommendations
- Review the performance of the external auditors and recommend to Council the selection or discharge the external auditors
Coordinate and Communicate
- Inquire of external auditors as to significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact on the financial statements
- Review the Society's general counsel, legal, tax, or regulatory matters that have a material impact on the financial statements and any material reports or inquiries received from regulators or government agencies
- Meet with the external auditors in separate executive sessions to discuss any matters that the committee or these groups believe should be discussed privately
- Ensure through inquiry, periodic updates, and other appropriate means that management is setting the appropriate tone by communicating the importance of the Society's values, code of conduct, and internal controls
- Maintain effective working relationships with the Executive and Finance Committees, management, the external auditors and legal counsel
- Regularly update the Executive Committee and Council about Audit Committee activities and make appropriate recommendations
- Coordinate activities with the other committees in the Finance Cluster, which also includes the Finance Committee and the Investment Committee. The chair will serve as the committee's representative on the cluster steering committee.
The committee is composed of no less than five members. No more than two of its members will also serve on the Finance Committee. The composition of the committee includes the past president, past treasurer, a present member of Council, a non-Council member, and a member-at-large, possibly a member of the Investment Committee. Committee members and the chair are recommended by the Committee on Committees and approved by Council.
The chair of the Audit Committee shall be a present member of Council and shall serve a two-year term as chair. The terms of the committee members shall be variable, based on the position, and staggered.
The Committee shall meet at least, but not limited to, once per year to review the audit before the fall Council meeting and have one conference call per year in the spring to discuss the scope of the upcoming audit, supplemented with additional conference calls as necessary.
The Audit Committee chair will make a formal presentation of the audit and its outcome to the Finance Committee and Council at the annual meeting each year.