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Audit Committee Functions

Evangelical Council for Financial Accountability | posted 11/07/2007
This article provided by the Engstrom Institute

ECFA Standard 2 requires that the Board or a committee consisting of a majority of independent members shall review the annual audit and maintain direct communication between the board and the independent certified public accountants.

If an audit committee is utilized, the purpose and responsibilities of the committee are to:

1. Make recommendations for the appointment of the independent auditors.
2. Review, evaluate, and oversee any recommendations the independent accountants make concerning internal accounting and management controls.
3. Review the annual statements with the independent accountants prior to submitting the statements to the board. This meeting should determine the independent accountants' level of satisfaction with the disclosure and content of the financial statements, and their assessment of internal controls.
4. Assist the Board in its fiduciary responsibilities of accounting and reporting.
5. Maintain communication between the board and the independent accountants by meeting on a regularly scheduled basis.
   
   The independent accountants must provide sufficient information and/or recommendations to the audit committee to permit the board to analyze the financial statements and make any necessary adjustments in operations.