The board of directors is entrusted with the responsibility of managing and supervising the business and affairs of a corporation. In order to facilitate oversight of the corporation, the board delegates this role to specialized committees comprised of board members. The audit committee of a company is a committee established by the board for the purpose of overseeing the accounting, financial reporting, and auditing processes. Each member of the audit committee must be a member of the board and must also be independent of the corporation. Given its critical financial oversight role, the audit committee is, perhaps, the most important committee in a corporation. Federal statutes and rule-making authorities dictate both the composition and duties of the audit committee, including Sarbanes-Oxley, the Securities and Exchange Act of 1934, and the Securities and Exchange Commission.
CSM has substantial experience in representing audit committees of various types of Banks with these highly complex tasks. In particular, we have assisted audit committees in the following areas:
- Review composition of audit committee and independence of committee members
- Review of board oversight of committee, including board review of audit committee
- Review of committee oversight over internal audit function
- Review committee oversight over existing bank compliance with laws and regulations, including banking regulations, Sarbanes Oxley, Exchange Act, and stock exchange regulations.
- Review and amendment of existing audit committee oversight and monitoring of external audit function.
- Review and amendment of general internal/external audit monitoring processes used by Audit Committee
- Review Audit Committee’s monitoring and assessment of material internal control issues
- Initial review of committee’s fraud risk assessment process
After the initial assessment is complete, regular and routine monitoring of board activities and oversight must be established. Among the many tasks and objectives, CSM conducts periodic reviews of audit strategies, resource planning, policies and programs, and related organizational structure and processes, evaluates audit coverage to determine whether it meets risks and governance demands, and reviews annual external audit plans and schedules, among others.
CSM’s lawyers, a few of which hold both JD certificates and financial or CPA credentials, understand the complex interplay between financial reporting and regulatory compliance structures. The resulting efficiencies yield streamlined audit committee consultations, whose primary function is to review both the financial reporting mechanisms and their legal impact on the corporation. Ultimately, CSM’s lawyers can effectively assist committees in their oversight and compliance monitoring objectives.
