Banner

11. Business and Financial Operations

11.1. Financial Operations

Go Back

11.1.5. Selection Of External Auditors

Printable version

Effective Date: 11-15-78

Revision Date: 3-16-04

UNIVERSITY POLICY STATEMENT 

External auditors shall be appointed by the Board of Regents to perform the annual financial audits within the following guidelines: 

  1. The external auditor shall report directly to the Board of Regents. 
  2. The Finance and Audit Committee shall be directly responsible for the appointment, compensation and oversight of the external auditor. 
  3. External auditor firms performing audit services are prohibited from performing non-audit services unless expressly approved by the Board of Regents. 
  4. Audit engagement letters must be approved by the Board of Regents. 
  5. The "lead" audit partner must rotate off the audit at a minimum of every seven years with a time-out of two-years.
  6. The external audit firm cannot have employed the CEO, CFO, Controller, Chief Accountant, or any person in any equivalent position, during the one-year period preceding the audit, without prior approval of the Board of Regents.
  7. The Finance and Audit Committee shall evaluate the performance of the external audit firm annually.
  8. External audit services will be competitively bid at a minimum of every five years with presentation to the Board of Regents for final external audit firm acceptance.
  9. Records related to audits should be stored for a minimum of seven years.

 

The external audit firm must report to the audit committee:

  1. All critical accounting policies and practices used by the client that have been discussed with management; 
  2. All alternative treatments of financial information, ramifications of such use, and the treatment preferred by the public accounting firm; 
  3. Other material written communication between the public accounting firm and management, such as the management letter or schedule of unadjusted differences.

 

UNIVERSITY PRACTICE 

The policy is based on guidance from the Sarbanes-Oxley Act of 2002 and the National Association of College and University Business Officers (NACUBO) and is to be implemented accordingly. 

 

RESPONSIBILITY FOR IMPLEMENTATION 

The Vice President for Business and Finance, or his/her designee(s), has overall responsibility for implementation and administration of this policy and for adopting, amending and/or revising related administrative policies and procedures. 

 

SCOPE OF POLICY COVERAGE 

This policy applies to the annual audits of Eastern Michigan University. 

Authority for Creation and Revision

Minutes of the Board of Regents, November 15, 1978, para. .2013M.
Minutes of the Board of Regents, January 28, 1981, para. .2345M.
Minutes of the Board of Regents, December 2, 2003, para. .6201M.
Minutes of the Board of Regents, March 16, 2004, para. .6256M.