Dallas Chapter of the Institute of Internal Auditors
Audit Committee Charter
Approved June 21st, 2011 by the Dallas IIA Board of Governors
The Audit Committee ("the Committee") is a standing committee of the Chapter Board of Governors ("the Board") and will have oversight responsibility, independence, authority, and specific duties as described below.
Composition and Organization:
- The Board shall appoint the Chairperson and Committee members.
- All members of the Committee shall be Chapter members who are in good standing.
- The Audit Committee Chairperson must have a CIA or CPA certification to demonstrate financial expertise. It is preferable that other Committee members also have such certification, however, it is not required as long as they have financial competency to carry out the Committee’s responsibilities and duties.
- The Audit Committee Chairperson reports to the Board.
- All Committee members serve a one-year term; however, there is no limit on the number of terms that a person can serve as a Committee member.
- The Committee will meet as needed to address matters on its agenda, but not less frequently than twice each year.
- The Committee may ask others to attend the meeting and provide pertinent information as necessary. Committee members will strive to be present at all meetings.
- AuditCommittee members shall be independent.
- Independence is defined as a person who is not actively involved in the original recordings of the financial transactions of the Chapter.
- Audit Committee members may not serve as an officer or currently work in the same organization as those serving in key Treasury functions for the Chapter.
Responsibilities and Specific Duties:
The Committee’s primary function is to assist the Board in fulfilling its oversight responsibilities with respect to the following specific duties.
- The Committee will arrange for the timely independent review of the Chapter’s Annual Report of Revenue and Expenses at the close of each Chapter year. The Committee will overseethe scope and general extent of this review which will cover agreed upon procedures. This review will also cover controls over reported revenue and expenses. The review should be performed by a person who is not actively involved in the original recording of the transactions. There is no requirement that this review be performed by a CPA or by an external auditor.
- Operational audits of Chapter activities will be conducted as a service to Chapter officers and Board, at the discretion of the Audit Committee. The Committee will determine the scope, timing and extent of any operational audit. These audits also should be performed by a person who is not actively involved in the original recording of the transactions.
- The Committee will discuss with Chapter officer’s significant audit findings and officers’ responses.
- The Committee will review the annual IRS forms 990 and 990T and provide them to the full Board for approval prior to submission to the IRS.
- A file of records and correspondence will be maintained to pass on to the next appointed Audit Committee Chairperson at the close of the Chapter year.
- Subject to the prior approval of the Board, the Committee is granted the authority to investigate any matter or activity involving Chapter accounting and reporting, as well as the organization's internal controls.
- Per authorization granted by the Board, the Committee has access to all documents and records as deemed reasonable and necessary to facilitate the successful completion of its duties. Documents and information given to the Committee will be handled in the same prudent and confidential manner as by those members normally accountable for them.
- During the year, the Treasurer will reportto the Committee any changes in accounting principles and their application.
- Generally, as part of the review of the Annual Report of Revenue and Expenses, the Chapter’s President will give an oral report (at least annually) regarding any Chapter matters that may have a material impact on the Annual Report of Revenue and Expenses.
- Upon completion of the review of the Annual Report of Revenue and Expenses, the Auditor will report any significant changes to the audit scope and/or serious disputes or difficulties encountered.
- The Committee will inquire about the cooperation received by the Auditor,including access to all requested records, data, and information.
- The Auditor will report to the Committee any "material" or "serious" recommendations that the Auditor may have. Typically, such recommendations will be presented by the Auditor in the form of a "letter of comments and recommendations" to the Committee. The Committee should review the officer's response to the letter and receive follow-up reports on action taken.There is no attestation required.
- The Committee will submit the independently reviewed Annual Report of Revenue & Expenses to the Board and ensure that the report is submitted to the IIA’s headquarters.
- Review the report of any operational audit, if applicable and report thereon to Chapter officers and Board.
The Committee should periodically assess whether the purpose, authority, and responsibility, as defined in this Charter, continue to be adequate to enable the internal auditing activity to accomplish its objectives. The result of this periodic assessment should be communicated to Chapter officers and the Board.