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Rules of Engagement: Dealing With External Auditors
Lawrence W. Schwartz
Banks’ financial statements tell their performance story to the outside world. Because the banks’ independent external auditor’s reports provide assurance about the quality of the information in the financial statements, the audit committee’s relationship with the bank’s external, independent auditor is very important. The auditor/audit committee relationship is key to the committee’s ability to monitor financial reporting risk, to oversee management of regulatory compliance risk, and to perform the committee’s other oversight and monitoring functions. Your audit committee’s management of this relationship is critical to the discharge of your obligations under most committee charters. Because the external auditor’s product is...
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Lawrence W. Schwartz is a partner and director of specialty practice of PBMares, LLP, a 250-person MidAtlantic accounting firm. He has been a partner in CPA and business advisory firms since 1984. He chaired the audit committee for BankAnnapolis from its inception until 2010. He is a director and chairs the audit committee for First Virginia Community Bank, a $600mm community business bank headquartered in Fairfax, VA.