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#1491903 - 01/07/11 08:29 PM Audit Committee Structure
COMPLIcated Offline
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We are nearing $500mm in assets and in the next 24 months may need to be revising our Audit Committee structure from what I understand. Currently, our Audit Committee is myself as Compliance/Internal Control Officer, 3 members of Senior Management, President, and 3 Board of Directors (which do not work at the bank). What kind of changes will we be needing to make?

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#1491940 - 01/07/11 08:42 PM Re: Audit Committee Structure COMPLIcated
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Audit Committee members should be independent of management.
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#1491953 - 01/07/11 08:46 PM Re: Audit Committee Structure A_G
Black & Gold Offline
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FDICIA Part 363
http://www.fdic.gov/regulations/laws/rules/2000-8500.html#fdic2000part3635

363.5 Audit committees.

(a) Composition and duties. Each insured depository institution shall establish an audit committee of its board of directors, the composition of which complies with paragraphs (a)(1), (2), and (3) of this section. The duties of the audit committees shall include the appointment, compensation, and oversight of the independent public accountant who performs services required under this part, and reviewing with management and the independent public accountant the basis for the reports issued under this part.

(1) Each insured depository institution with total assets of $1 billion or more as of the beginning of its fiscal year shall establish an independent audit committee of its board of directors, the members of which shall be outside directors who are independent of management of the institution.

(2) Each insured depository institution with total assets of $500 million or more but less than $1 billion as of the beginning of its fiscal year shall establish an audit committee of its board of directors, the members of which shall be outside directors, the majority of whom shall be independent of management of the institution. The appropriate Federal banking agency may, by order or regulation, permit the audit committee of such an insured depository institution to be made up of less than a majority of outside directors who are independent of management, if the agency determines that the institution has encountered hardships in retaining and recruiting a sufficient number of competent outside directors to serve on the audit committee of the institution.

(3) An outside director is a director who is not, and within the preceding fiscal year has not been, an officer or employee of the institution or any affiliate of the institution.
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#1496742 - 01/18/11 11:19 PM Re: Audit Committee Structure Black & Gold
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Adding just one additional part - at least one independent member of the audit committee should have an accounting or similar background (subject matter expert) so they can provide real guidance to the committee and bank. It would be ineffective if all three were businessmen with little skills to drive the process (e.g. doctor, architect and realtor.)
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#1499708 - 01/25/11 03:46 PM Re: Audit Committee Structure Rocky P
kjbabington Offline
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What are the requirements governing an Audit Committee's structure and responsibilities until you reach the threshold of $500 million? Are there any regulatory references?

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#1499713 - 01/25/11 03:54 PM Re: Audit Committee Structure kjbabington
rlcarey Offline
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#1503408 - 02/01/11 06:03 PM Re: Audit Committee Structure rlcarey
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Here is a link to a training program for examiners that pretty much oulines everything you need to know: http://www.stlouisfed.org/col/courses/tool/start/start.cfm?m=020&l=02&s=2.htm
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#1533629 - 04/08/11 09:19 PM Re: Audit Committee Structure CEK
MyKidsMom Offline
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Who, from management, should regularly attend the meetings?

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#1533651 - 04/08/11 10:39 PM Re: Audit Committee Structure MyKidsMom
Black & Gold Offline
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Depends on the wants and needs of your Audit Committee. At my bank, management attends only at the request of the Committee - the CFO has attended a couple of times. Some of our Committee's responsibilities are actually handled at the Board level, in which case the CEO, CFO, and COO are in attendance. Our Committee mainly oversees the Internal Audit function.
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