Audit Committee Charter Approved Dec 2008

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Sujets

• management
• risk management

Informations

• Publié par: Foil
• Nombre de lectures: 17
• Langue: English

Extrait

Audit Committee Charter Organization The Audit Committee (“Committee”) is a committee of the Board of Directors (“Board”) of Farm Credit Services of America, ACA/FLCA/PCA (“Association”) and has responsibility delegated from the full Board. This charter governs the operations of the Committee. Purpose The Committee shall provide assistance to the Board in fulfilling its fiduciary and oversight responsibilities to the shareholders, potential shareholders, and others in the following areas. ≠Integrity of the Association’s financial statements ≠Financial reporting process ≠Systems of internal accounting and financial controls ≠Performance of the Association’s internal audit function and external auditors ≠External auditor’s qualifications and independence ≠Association’s compliance with ethics policies and legal and regulatory requirements Authority The Committee has authority to conduct or authorize investigations into any matters within its scope of responsibility. It is empowered to: ≠Appoint, compensate, retain, and oversee the work of the external auditor, who shall report directly to the Committee, (including resolution of disagreements between Association leadership and the external auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services at the Association. ≠Pre-approve all internal auditing and allowable non-audit services to be provided by the external auditors as well as ensure the external auditors are not providing prohibited non- audit services and receive a written certification from them that they are not providing any prohibited non-audit services. ≠Retain independent counsel, accountants, or others to advise the Committee or assist in the conduct of an investigation. ≠Provide appropriate funding for (a) compensating any accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Association, (b) compensating independent counsel and other advisors engaged by the Committee, and (c) paying ordinary administrative expenses the Committee incurs in carrying out its duties. ≠Seek any information it requires from employees or external parties. ≠Meet with Association leadership, external auditors, or outside counsel, as necessary. Membership, Qualifications, & Terms

Approved 12-18-08

The Committee shall consist of at least three, but no more than five Board members. One Committee member will be an outside Director. As part of the annual Board re-organization, Committee selections will be performed by the Board Executive Committee. Committee members may be replaced by the Board Executive Committee. At least one Committee member shall have accounting or related financial management expertise. Committee members shall have practical knowledge of basic finance and accounting practices or shall become knowledgeable within a reasonable period of time after appointment to the Committee. Committee members may enhance their familiarity with finance and accounting by participating in educational programs. The Committee shall be composed of Board members who are independent of Association leadership and are free from any relationship that, in the opinion of the Board, would interfere with their exercise of independent judgment as a Committee member. Committee members have no term limits and serve on staggered two year terms to provide continuity in the committee. After the annual Board re-organization and subsequent Committee selection, each Committee will select a Committee chair by majority vote of the Committee membership. In the absence of the chair, the Committee may temporarily appoint an acting chair. Committee Meetings The Committee will meet at least quarterly and may call additional meetings as needed. Meetings may be called by the Committee Chair or by the Board Chair. A majority of the Committee membership shall constitute a quorum. Other Directors and Leaders may attend meetings upon request of the Committee Chair. The Committee Chair is responsible for approving or disapproving such request and limiting the number of meeting visitors. Other responsibilities for Committee meetings include the following. 1.The Vice President – Internal Audit, in conjunction with the Committee Chair, will develop an agenda for each meeting encompassing: a.Evaluation of key risks, internal controls, and financial reporting b.Discussion of recent reviews c.Current issues of interest and emerging issues d.Exception/open item follow-up e.Committee training and best practice study f.Special reports g.Other internal audit matters

Approved 12-18-08

2.The Committee Chair will be responsible for ensuring the following. a.An open dialogue and time for committee questions. b.A focus of discussion on important business and financial risks. c.Adequate time for the Committee to discuss issues related to approval items or recommendations for the Board. d.A report of committee activities to the Board of Directors through a summary of discussion topics and recommendations. Duties and Responsibilities 1.Financial Statements a.Oversee the Association’s financial reporting process on behalf of the Board and report the results to the Board. b.Review significant accounting and reporting issues with Association leadership and external auditors including complex or unusual transactions, highly judgmental areas, and recent professional and regulatory pronouncements and understand their impact on the financial statements. c.Review with the external auditor, Association leadership, and the Vice President - Internal Audit the results of audits including any difficulties encountered and audit concerns. d.Review and recommend certification of the annual financial statements and annual report to the Board upon completing its review with the external auditors, Association leadership, and the Vice President - Internal Audit and resolving any issues. Ensure accurate and complete information that reflects appropriate accounting principles. e.Review and recommend certification of the quarterly financial statements and quarterly report with Association leadership and Vice President - Internal Audit prior to publishing and consider whether it is complete and consistent with the information known to Committee members. 2.Internal Controls a.Evaluate the adequacy and effectiveness of the Association’s administrative, operating and accounting policies, including information technology security and control, through active communications with Association leadership, internal audit, and external auditor. b.Understand and evaluate the adequacy of the Association’s internal accounting control by review and discussion of written reports from the internal and external auditors and monitor Association leadership’s response and actions to correct any noted deficiencies. c.Oversee the Association's system of internal controls, including those controls relating to the Association’s compliance with applicable laws and regulations or relating to the preparation of each quarterly or annual report.

Approved 12-18-08

d.Review any material weakness in the Association’s internal accounting control structure identified as a reportable condition by the Association's independent auditor and monitor and recommend, as deemed necessary by the Committee, the correction of any such deficiency. e.Review Association leadership’s assertion on its assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the external auditor’s report on leadership’s assertion. f.Ensure a process exists for confidential and anonymous submission of concerns regarding questionable accounting, internal controls, and auditing matters. 3.Internal Audit a.Review and approve the annual audit plans, scope of activities, staffing, and organizational structure of the Internal Audit function including audit plan progress and deviations. b.Solicit input on any difficulties encountered in the course of the audit work including any restrictions on the scope of work or access to required information. c.Review and concur with the appointment, replacement, or dismissal of the Vice President - Internal Audit. Review the succession planning for the Vice President - Internal Audit position. Review and approve or disapprove the performance review, salary adjustments, and grade change for the Vice President - Internal Audit as recommended by the President and CEO d.Meet separately with the Vice President - Internal Audit to discuss any matters the committee or Internal Audit believes should be discussed privately. e.Review internal audit and credit review reports and related responses from Association leadership. f.Review and evaluate the effectiveness of Internal Audit’s efforts including the independence and authority of its reporting and coordination with the external auditors. 4.External Audit a.Appoint and terminate, compensate, and oversee the work of the external auditors, including resolution of disagreements between Association leadership and the auditor regarding financial reporting. The Committee shall pre-approve all audit and non-audit services provided by the external auditors and shall separately approve any other services. The Committee may delegate pre-approval authority to a member of the Committee. The decisions of any Committee member to whom pre-approval authority is delegated must be presented to the full Committee at its next scheduled meeting. b.Review and confirm the independence of the external auditors by obtaining statements on relationships between the auditors and the Association. Also review the firm’s internal quality control procedures and any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years. c.Review the external auditors' proposed audit scope and approach, including coordination of audit effort with the Vice President - Internal Audit and Association leadership, and have external auditors report to the Audit Committee as necessary.

Approved 12-18-08

d.Receive regular reports from the external auditor on the critical policies and practices of the Association and alternative treatment of financial information within generally accepted accounting principles. e.Meet separately with the external auditors to discuss any matters the Committee or auditors believe should be discussed privately. f.Provide an annual assessment of the external auditors to the Board based on the Committee’s dealings with the external auditors and information received from Association leadership and the Vice President - Internal Audit. 5.Compliance a.Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of Association leadership’s investigation and follow-up, including disciplinary action, of any instances of noncompliance. b.Review the findings of all examinations by regulatory agencies, and all auditor observations, as well as the activities taken by Association leadership on all such recommendations. c.Review the process for communicating the standards of conduct and the code of ethics to Association personnel and for monitoring compliance therewith. d.Obtain regular updates from Association leadership and company legal counsel regarding compliance and legal matters. 6.Other Responsibilities a.Review the Association’s enterprise risk management and risk assessment programs. b.Perform any other duties or responsibilities expressly delegated to the Committee by the Board from time to time. c.Institute and oversee special investigations as the Committee determines necessary. d.On an annual basis, review and assess the Committee’s performance and take the necessary actions to enhance performance. It is not the duty of the Committee to plan or conduct audits or to determine that the Association’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. Leadership is responsible for the preparation, presentation, and integrity of the Association’s financial statements and for the appropriateness of the accounting principles and reporting policies that are used by the Association. The external auditors are responsible for auditing the Association’s financial statements and for reviewing the Association’s unaudited interim financial statements.

Approved 12-18-08