Article IV, Section 7 of the Corporate Bylaws of AUB states:
"The Board of Trustees shall elect three or more trustees to constitute an audit committee. The Audit Committee shall hire and approve the compensation of the external auditor, shall define the scope of the audit to be performed, and shall generally oversee the external auditor. The committee shall review the annual audited financial statements of the Corporation prior to their submission to the board. The
Audit Committee shall review reports from the internal auditor, who reports to the Audit Committee and the president, and shall review and approve the internal auditor's annual audit plan. The appointment or dismissal of the internal auditor shall be subject to the approval of the Audit Committee. The Audit Committee shall approve the compensation of the internal auditor. The Audit Committee may examine and consider such other matters relating to the internal and external audit of the accounts of the Corporation and relating to the Corporation's financial affairs and financial controls as the Audit Committee may, in its own discretion, determine to be desirable".
The audit function plays an essential and useful role in the conduct of successful operations. It serves to examine and evaluate financial, administrative, and operational activities of the University, supplying the board and management personnel at all levels with information to assist in their control of the assets and operations for which they are responsible. The policy applies to the auditing relationship with all university functions and operations and sets forth the guidelines by which this function will be carried on.
External Auditors (Independent External Auditors or Regulatory Authorities) - The Audit Committee of the Board of Trustees will appoint the University's external auditors to the Board of Trustees to assure the conduct of audits as required by statutory regulations and financial community considerations. The external auditors may be requested to perform special non-audit services as deemed necessary by management, to the extent that such services do not in any way affect the independence of the external auditors, nor limit the scope of their independent examination. The Audit Committee will review the extent of such non-audit services on an annual basis to assure that such independence is not impaired. The external auditors will also meet periodically with the Audit Committee to discuss issues relating to the conduct of the audit and to express any concerns arising from their work.
The University Auditor responsibilities and reporting are defined in the Internal Audit Charter.
The University Auditor will report periodically to management and the Audit Committee regarding:
The internal audit office's purpose, authority, and responsibility;
Significant risk exposures and control issues, including fraud risks, governance issues, and other matters requiring the attention of, or requested by, the Audit Committee;
The internal audit office's plan, amendments to the plan and performance relative to its plan;
Resource requirements;Results of audit engagements or other activities and any opportunities for improving the effectiveness or efficiency of governance, risk management, and control processes identified;An assessment on the adequacy and effectiveness of the university’s processes and controls for those functions examined as part of and as outlined within the annual approved audit plan;
Any response to risk by management that may be unacceptable to AUB;
The internal audit office's conformance with The IIA's Code of Ethics and Standards, and action plans to address any significant conformance issues.
The University Auditor will confirm to the Audit Committee, at least annually, the organizational independence of the internal audit office.
The University Auditor will disclose to the Audit Committee any interference and related implications in determining the scope of internal auditing, performing work, and/or communicating results.
The director of internal audit will direct a broad, comprehensive internal audit plan for the University. The internal audit plan will primarily examine and evaluate the adequacy of effectiveness of the system of management control and those policies, procedures, and plans the University has adopted to guide its activities.
The internal auditors shall have full, free, and unrestricted access to all operations, records, property, and personnel within the University. All employees shall cooperate fully in making available any material or information requested by an internal auditor. Further, all employees are expected to bring to the attention of the director of internal audit any situation involving improper activity or noncompliance with applicable policies, plans, procedures, laws, or regulations of which they have knowledge.
The Audit Committee expects that managers will be candid with the internal auditors and not conceal information which could be interpreted by subordinates as a signal that university policies and procedures, including accounting and control rules, can be ignored whenever they are inconvenient.
Management is charged with the responsibility for controlling the operations of the American University of Beirut in a manner which
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