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CalSTRS audits committee approves revisions to Audit and Risk Management policy
Summary
The CalSTRS Audits and Risk Management Committee approved updates to its Audit and Risk Management policy to align with current audit standards and clarify independence rules, including removing language that allowed an external financial-statement auditor to prepare financial statements.
The Audits and Risk Management Committee of the California State Teachers Retirement System approved revisions to its Audit and Risk Management policy during a teleconference meeting, voting unanimously to adopt the changes after a staff presentation.
Committee members were asked to consider updates intended to bring the policy up to current audit standards, improve clarity and consistency, and preserve auditor independence. The revisions include removing an allowance that would permit an independent financial-statement auditor to prepare financial statements, a change staff said was necessary to avoid auditors “auditing their own work.”
Sheryl (staff member), presenting the item, said the policy had not been updated since 2005 and that staff performed a “thorough review” to modernize terminology, references to audit standards and to consolidate the document into a single policy. “One of the bigger changes I would call to your attention is that we removed the opportunity for the independent financial statement auditor to prepare financial statements,” she said.
Committee members discussed whether the item required a second reading. Dr. Yetman (external consultant) and staff said the committee could approve the revisions at the same meeting if it wished; the committee moved and seconded the motion and adopted the policy by roll call vote.
Votes at a glance - Approval of agenda: Miss Whitaker — Aye; Mr. Oppenheim — Aye; Mr. Ruffino — Aye; Mr. Patterson — Aye; Chair Bradford — Yes. Motion passed. - Approval of consent agenda (items 2 and 3): moved and seconded; roll call recorded as in meeting; motion passed. - Approval of revisions to Audit and Risk Management policy (action item 4): moved and seconded; roll call recorded as Miss Whitaker — Aye; Mr. Oppenheim — Aye; Mr. Ruffino — Aye; Mr. Patterson — Aye; Chair Bradford — Yes. Outcome: approved.
The committee recorded no public comments on the policy item. Staff indicated the edits are intended to preserve auditor independence and implement current audit standards; no further board action was identified at the meeting.
The committee proceeded to its next agenda item, the annual audit-plan results update.
