Publications

• 30 Second Ideas
• Accounting Updates
• Alerts
• Articles
• Business Surveys
• Construction Edge
• Healthcare Edge
• Insurance Edge
• Legal Talent
• Manufacturing Edge
• Not-for-Profit Edge
• Quick Links & Good Ideas
• SEC Edge
• Strategy Insights Blog
• Surviving the Upturn
• Tax Highlights

Article Author:

Audit Committee Self-Evaluations

Performance evaluations are an important tool to help organizations assess their effectiveness against established metrics. Many not-for-profit organizations spend a great deal of time and resources monitoring and evaluating the performance of their programs, finances, employees, and vendors. However, when it comes to evaluating the performance of boards and committees, many do not know where to begin or what criteria should be used in such an evaluation. As a result, these evaluations are often delayed or sometimes never completed at all. For an audit committee, a self-evaluation of its effectiveness is even more important because of the significance of its responsibilities. 

The American Institute of Certified Public Accountants (AICPA) provides a good starting point for audit committees that are planning to conduct a self-evaluation. The AICPA Audit Committee Toolkit: Not-for-Profit Organizations includes an audit committee self-assessment tool that contains guidelines and questions to help audit committees determine their strengths and weaknesses.

Some of the metrics addressed in the questions include:

• Financial literacy
• Independence
• Use of the audit committee charter to guide meeting agendas
• Strength of financial-reporting processes due to interactions with the audit committee 
• Participation in continuing education relevant to audit-committee responsibilities

No two audit committees are alike, and any self-evaluation should be tailored to your committee’s specific needs. One way of tailoring a self-evaluation is to base the questions on your audit committee charter. This will help you focus your assessment on the responsibilities that are important to the committee and to the organization. Armed with the results of a self-evaluation, your audit committee will be able to improve upon its effectiveness and help fulfill its responsibility to the board. 

For further information please contact Jim Hagestad, Audit Senior Manager, jhagestad@BlackmanKallick.com or 312-980-3245 or your Blackman Kallick representative.

This publication is part of Blackman Kallick’s marketing of professional services, and is not written tax advice directed at the specific facts and circumstances of any person and/or entity. Contents of this publication are of a general nature, and you should not act on this information without obtaining professional advice from your business advisor that is appropriately tailored to your individual needs and circumstances. This written advice is not intended or written to be used, and cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.