AUDIT COMMITTEE CHARGE

Transcription

1 AUDIT COMMITTEE CHARGE Number f Members 5-7 Must be an dd number fr purpses f vting. Cmpsitin Members shall include the Secnd Past President, the Secretary and Treasurer, at least ne ther Bard member and tw t fur individuals with apprpriate backgrunds. A majrity f the Cmmittee shall be current HRS Bard members. Individuals may be trustees, at-large members, Allied r Early Career Prfessinals, r nn-members. Apprpriate backgrund is backgrund r expertise in accunting r auditing, such as a retired CFO r auditr, nt simply financial r business expertise. See als Limitatins belw. The Sciety s Secnd Past President shall serve as Chair. The Chair may invite guests as needed t expedite infrmatin sharing. Methd f Appintment Ex ffici members serve autmatically. Other members shall be appinted by the President-Elect, in cnsultatin with the President and the Chief Executive Officer. Term f Office Ex ffici members serve during their term in ffice. Tw years fr appinted members. Reappintment fr ne additinal, cnsecutive tw-year term is permissible. Strategic Plan Alignment Secure Financials Accuntability Reprts t: HRS Bard f Trustees; Heart Rhythm Fundatin Bard (when active). Staff Liaisns: Chief Operating Officer (primary); Vice President, Business Operatins (secndary). Key Relatinships: Auditrs (wh reprt t the Audit Cmmittee), Executive Cmmittee. See als relatinships with Management under Meeting Frequency. Purpse T prvide independent versight f the financial systems, management and reprting f the Sciety and the entities it cntrls (as defined by the IRS), including the Fundatin.

2 Respnsibilities Related t the Bard Review and reprt t the bards f the Sciety and its entities (when active) regarding the fllwing: Financial statements and reprts that will be prvided t public cnstituencies and tax authrities. Internal accunting and asset management cntrl plicies and systems f the Sciety and its entities and the Auditrs recmmendatins fr the imprvement f thse plicies and systems. Relevant and material accunting plicies adpted by the Sciety and its entities fr financial statement presentatin purpses. All audit prcesses, including scpe f audits and any disputes between Management and the Auditrs regarding audit r accunting matters. Reprt t the Bard(s) at least annually upn the cnclusin f the audit prcess and in cnnectin with the issuance f the Auditrs reprt n the financial statements f the Sciety and its entities, and at ther times the Cmmittee deems necessary. Related t the Independent Auditrs Select and appint the independent certified public accuntants (the Auditrs) wh shall prvide auditing and related services t the Sciety and its entities (if active). Set the cmpensatin fr services by the Auditrs. Apprve all fees paid t the Auditrs fr audit wrk and ther wrk perfrmed by the Auditrs. Cnfirm the independence f the Auditrs, including examining ther prfessinal services prvided t the Sciety and its entities by the Auditrs and the reasnableness f the fees paid. Seek input frm Management and the Auditrs regarding the need t engage additinal Auditrs, and make the decisin n the selectin and engagement f any additinal firm. Oversee the perfrmance f services by the Auditrs, including dispute reslutin. Peridically review the perfrmance f the Auditrs, including the rtatin f the primary audit partner, and recmmend their retentin r replacement. Related t Cnducting the Annual Audit Apprve the scpe f the annual audit in cllabratin with the Auditrs, the Treasurer(s) f the Sciety and its entities (if active) and their respective Chief Operating Officers.

3 Receive and review the reprt frm the Auditrs at the cnclusin f interim fieldwrk. Apprve the timeline fr receipt f audited financials, accmpanying ftntes, representatin letter, and management reprt, including Management s respnse. Meet with the Auditrs and Management in separate executive sessins fr private discussins as necessary. Reslve any disputes between the Auditrs and Management regarding internal accunting cntrls, accunting plicies and practices r financial statement presentatin issues. Related t Receiving/Apprving the Annual External Audit and Annual Financial Statements Inquire f Management and the Auditrs abut significant risks and expsures, and assess Management s steps t minimize them. Review with the Auditrs The adequacy f the internal cntrls f the Sciety and its entities, including cmputerized infrmatin system cntrls and security. Any significant findings and recmmendatins f the Auditrs, including any deficiencies r weaknesses in such cntrls and as therwise disclsed in the Auditr s frmal management letter. Management s respnse t any cmments. Review with Management and the Auditrs The annual financial statements and related ftntes f the Sciety and its entities (if active). The Auditr s reprts n the financial statements. The Auditr s qualitative judgments abut the apprpriateness, nt just the acceptability, f accunting principles and financial disclsures and hw aggressive (r cnservative) the accunting principles/plicies and underlying estimates are. Any serius difficulties r disputes with management encuntered during the curse f the audit. Any ther issues cncerning the audit prcedures r findings that Generally Accepted Auditing Standards (GAAS) require the Auditrs t discuss with the Cmmittee. At the ptin f the Audit Cmmittee Review published dcuments cntaining the financial statements f the Sciety and its entities t ensure the reprting is cnsistent with the infrmatin in the financial statements.

4 Review interim financial reprts befre they are presented t the full Bard(s) f Trustees f the Sciety and its active entities. Related t State and Federal Reprting Ensure that Management has filed infrmatin and tax reprting frms annually as required by law. Ensure that Management has made the prper attestatins t the infrmatin reprted n IRS Frms 990. Ensure the Cmmittee is infrmed f any significant audits, investigatins r inquiries made by tax and ther authrities related t either the Sciety r its entities. Review and apprve the annual Frm 990 returns. Other Respnsibilities Peridically review the Audit Cmmittee s charge fr adherence t best practices in nnprfit auditing, and recmmend revisins t the Gvernance Cmmittee. Review legal and regulatry matters that may have a material effect n the financial statements f the Sciety and its entities, cmpliance plicies and prgrams and reprts frm regulatrs. Act as a sunding bard fr accunting, reprting r internal cntrl prcedures raised by the Senir Vice President & Chief Operating Officer, Chief Executive Officer r thers n behalf f the Sciety and the Fundatin. Cnfirm that significant findings and recmmendatins made by the Auditrs are acted upn apprpriately and prmptly. Decisin-Making Authrity Establish the cmmittee s prcedures. Select and appint Auditrs. Determine scpe f Auditr s services. Apprve fees paid t Auditrs. Dismiss f Auditrs fr reasnable cause, in the gd faith judgment f the Cmmittee. Cnduct r authrize investigatins int matters within the Cmmittee s scpe f respnsibilities, including engaging independent cunsel and/r independent accuntants. Engage expert cnsultants and advisers. Limitatins All members f the Audit Cmmittee, whether ex ffici r therwise, must be independent. An individual is cnsidered independent if he r she is free f any

5 relatinship that culd influence his r her judgment as an Audit Cmmittee member. N member f the Audit Cmmittee shall be an emplyee, cnsultant r prfessinal service prvider t the Sciety r its entities, have any utside business r cmmercial relatinship with the Sciety r the Fundatin r be assciated with a majr vendr t the Sciety r the Fundatin. When there is sme dubt abut independence, as when a member f the Audit Cmmittee has a cnsulting arrangement with a majr vendr, the member shuld recuse him- r herself frm any decisins that might be influenced by that relatinship. With the exceptin f the Secretary and Treasurer, members f the Audit Cmmittee are prhibited frm serving simultaneusly n the Finance Cmmittee. Meeting Frequency At least three meetings annually, by telecnference: nce befre the Audit Fieldwrk begins, nce the Audit Fieldwrk is cmplete but befre the financial statements f the Sciety and its entities are issued, and nce fr review f the 990 tax returns prir t filing. The Chair may request an executive sessin f the Audit Cmmittee with the Auditrs (fllwing the annual audit f each entity) at which n emplyees f the Sciety r its entities shall be present. The Cmmittee may meet regularly with the Auditrs and Management in separate executive sessins, fr private discussins as necessary. Additinal meetings, including with the Auditrs r Management in separate executive sessins fr private discussins as needed. Estimated Time Cmmitment 8 hur per year (during the Audit seasn/cycle) Scheduled Three t five Cmmittee Cnference Calls Ad Hc Cmmittee Cnference Calls (as needed) Busiest Times f the Year Audit/Tax preparatin cycle: (Octber - January) Other The Audit Cmmittee ften requires quick turnarund times t respnd t Auditr cncerns.