Monitor Company 's Internal Control Function

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♣ Monitor company’s internal control function. The AgFeed case illustrates the need for the audit committee to fully monitor the internal control function. This includes consideration of issues that are outstanding before become a member of the committee. Communications with internal audit, management and external auditors can aid in apprising the committee of these issues.
The Audit Committee’s Role in Overseeing the Auditors, Investigating Fraud & Handling Complaints [pick words carefully]

Part III: Look for Signs and Listen to the Whistles

“Setting the appropriate tone at the top has never been more important for audit committees or boards as a whole.” – Message from Cathy Engelbert, CEO, Deloitte LLP, Audit Committee Guide
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This case illustrates the importance of following through on all duties allocated to the audit committee in its charter. These duties may be required by law or listing requirements or by delegation to the committee by the company’s Board. For example, as noted in Part I, Exhibit A, SEC Rule 10A-3(b)(3) requires each audit committee to establish procedures for the receipt, retention, and treatment of complaints received by the listed company regarding accounting, internal accounting controls, or auditing matters; and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. NYSE rules require that the audit committee assist the board with oversight of the internal audit function and compliance with legal and regulatory requirements [See Exhibit C].

After a fraud is uncovered, the audit committee’s charter and applicable listing requirements may be scrutinized by plaintiffs who suffered a loss, as demonstrated in the following case.

Background. Per allegations In re Veeco Instruments, Inc. Securities Litig., [434 F. Supp.2d 267 (S.D.N.Y. 2014) (In re Veeco)], Veeco acquired Emcore’s TurboDisc division in November 2003 for $63.7 million. This acquisition increased its workforce by over 10% and added a new plant to propel Veeco as a global leader in compound semiconductor deposition technologies. TurboDisc boosted Veeco’s net
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