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Working Guide for an Investment Company's Audit Committee
For more than 30 years, as part of our commitment to the US investment management industry, we have been providing this reference tool for use by audit committees of registered open-end and close-end investment companies.
Since our last guide was issued, the increased volatility in the securities market and the extensive use of innovative instruments combined to make portfolio valuation a more complex process. Additionally, fund boards, particularly audit and valuation committees, are paying greater attention to oversight of the valuation process. Regulators are promoting a risk awareness culture, and fund boards are being asked to provide oversight of the risk assessment and management processes. Questions are being raised about whether the audit committee is the appropriate place for this oversight function to reside.
While the economic environment is causing many organizations to seek cost reductions, regulators and boards are raising concerns about the impact these reductions may have on the quality of service and the organization's ability to provide the appropriate level of internal controls. Add to this the ever-increasing complexity of financial reporting and disclosure requirements, and the responsibilities and challenges of a fund's audit committee have never been greater.
Since our last guide was issued, the increased volatility in the securities market and the extensive use of innovative instruments combined to make portfolio valuation a more complex process. Additionally, fund boards, particularly audit and valuation committees, are paying greater attention to oversight of the valuation process. Regulators are promoting a risk awareness culture, and fund boards are being asked to provide oversight of the risk assessment and management processes. Questions are being raised about whether the audit committee is the appropriate place for this oversight function to reside.
While the economic environment is causing many organizations to seek cost reductions, regulators and boards are raising concerns about the impact these reductions may have on the quality of service and the organization's ability to provide the appropriate level of internal controls. Add to this the ever-increasing complexity of financial reporting and disclosure requirements, and the responsibilities and challenges of a fund's audit committee have never been greater.
