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The Standing Committee on Audit consists of seven members including the Treasurer, who is a member ex-officio with a vote. Three members of the Committee shall be Association members who are not members of the Board of Governors. Three members of the committee, other than the Treasurer, shall be members of the Board of Governors representing each of the three Association years of the term on the Board. At the Annual Meeting in 2005 and each succeeding third year, one of these members shall be appointed. At the Annual Meeting in 2006 and each succeeding third year, one of these members shall be appointed. At the annual meeting in 2007 and each succeeding third year, one of these members shall be appointed. Members other than the Treasurer shall be appointed by the Board of Governors upon recommendation of the President. The President shall annually designate a chair. All members should be financially knowledgeable and have no relationship that may interfere with the exercise of their independence with respect to the Association and its management.

The Audit Committee shall:

(1)     recommend the selection, retention, and compensation of the Association’s independent auditors for approval by the Board of Governors;

(2)     ascertain that the Association’s auditors are independent from the Association and its management and are ultimately accountable to the Board of Governors;

(3)     review for the Association and all organizations required to be consolidated with the Association under generally accepted accounting principles (a) the results of the annual external audits of all financial statements and records; (b) the reports of independent auditors on the applicable financial statements; (c) any matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards and the disclosure requirements of the Independence Standards Board; (d) the system of internal controls; (e) the independent auditors’ letter of recommendations; (f) the Association management’s responses to the letter of recommendations; and (g) after reviewing all of these items to its satisfaction, the Audit Committee shall recommend to the Board of Governors that the Board of Governors accept the Association’s audited financial statements;

(4)     review the internal audit function of the Association including (a) the independence and authority of its reporting obligations; (b) the proposed internal audit plan for each fiscal year; and (c) all reports issued by the internal audit department;

(5)     receive, investigate when necessary, and cause response to be made to inquiries or complaints by any member or employee of the Association concerning financial operations of the Association; and

(6)     assist the Board of Governors in fulfilling its oversight responsibility relating to: (i) the integrity of the Association’s financial statements and financial reporting process and the effectiveness of the Association’s system of internal accounting and financial controls; (ii) the evaluation of management’s processes to identify, assess and manage the Association’s enterprise risk issues; (iii) the administration of the Association’s Business Conduct Standards, compliance process and activities through the Association’s Ethics Office; and (iv) such other matters as may be delegated to it by the Board of Governors from time to time.