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Are you getting the most out of your Audit Committee?

Why are we talking about audit committees now? We are committing a renewed focus on audit committee requirements and best practices for three primary reasons: Financial Institutions are becoming larger, Financial Institutions are taking certain actions that impact audit committees, and there are increased expectations of what audit committees are responsible for. Read more as we go through the ins and outs of audit committees for financial institutions today.

Audit Committees are important as strong corporate governance has become a focus of stakeholders— investors, regulators, customers, members, and employees. Strong audit committees and charters are vital to provide assurance regarding the integrity of financial reporting, proper controls, and compliance. There has been an oversight of the financial reporting process, control environment, risk assessment, external audit, internal audit, regulatory compliance, and conflicts of interest.

Valuable qualities of an audit committee include:

  • Understanding the charter, including roles and responsibilities
  • Diligent overseers to ensure findings are properly evaluated and addressed
  • Spending time to understand the institution’s financial reporting process, operations, and culture
  • Listening and asking probing questions
  • Understanding business and risk and how to manage risk
  • Establishing tone at the top and insisting on integrity and accuracy
  • Establishing strong working relationships with management and internal auditors
  • Having flexibility to adapt to a changing environment

There is an evolving and expanding expectation of the fiduciary responsibility of audit committees of financial institutions, especially growing institutions. Learn more about our Financial Institution Audit team here.

If you have any questions, please feel free to contact us.

About the Authors

Tom Milburn, CPA | Principal

Tom has dedicated his practice to providing accounting, auditing, advisory and tax services to financial institutions throughout Virginia, West Virginia, Maryland and Pennsylvania. A leader of our Financial Institutions Team, Tom also serves on our IT Steering Committee and Organizational Development Steering Committee and conducts annual audit training for new hires.

Brandon Driver, CPA | Principal

Brandon is an audit leader for the bank team.  He regularly prepares audit and accounting updates for the team.  Brandon has worked exclusively for the bank team since graduating from Virginia Tech performing external audits, internal audits, bank tax services and SOX consulting.