Maintaining an effective system of internal controls is vital for achieving a company's business objectives, obtaining reliable financial reporting on its operations, preventing fraud and misappropriation of its assets, and minimizing its cost of capital. Both internal and independent auditors contribute to a company's audit system in different but important ways. Having an effective audit system is important for a ICANN because it enables it to pursue and attain its various corporate objectives. ICANN processes need various forms of internal control to facilitate supervision and monitoring, prevent and detect irregular transactions, measure ongoing performance, maintain adequate business records and to promote operational productivity. Internal auditors review the design of the internal controls and informally propose improvements, and document any material irregularities to enable further investigation by management if it is warranted under the circumstances. Without a system of internal controls or an audit system, a ICANN would not be able to create reliable reports for internal and external purposes. Thus, it would not be able to determine how to allocate its resources and would be unable to know which of its segments or product lines. Additionally, it could not manage its affairs, as it would not have the ability to tell the status of its assets and liabilities and would be rendered undependable in the marketplace due to its inability to consistently produce its services in a reliable fashion. Accordingly, an audit system is crucial in preventing debilitating misstatements in a ICANN's records and reports. In this regard i am in agreement with Seuns Statement On 3/23/15, Seun Ojedeji <seun.ojedeji@gmail.com> wrote:
I beg to differ Carrie, I don't understand the rationale behind your claim that an audit will lack independence (credibility) because ICANN is paying. Please tell me which audit company does free auditing without being paid....most organisations that use external auditors pay them from the same company money and that does not diminish the vl credibility of the report.
I think we may be introducing so much unrealistic examples in this process.
Regards
sent from Google nexus 4 kindly excuse brevity and typos. On 23 Mar 2015 12:40, "Carrie" <carriedev@gmail.com> wrote:
The fact that ICANN's Board oversees the audit is a statement that the audit is NOT an independent independent audit. Does ICANN pay for that audit too? I expect they do hence people that pay tend to get the results they seek so from the contractor wanting more work hence the question of the auditing entity, do they do work for Board members and other related affiliates and associations too.
Sincerely Carrie Devorah Www.centerforcopyrightintrgrity.com
Sent from my iPhone
On Mar 23, 2015, at 5:46 AM, "Paul Rosenzweig" < paul.rosenzweig@redbranchconsulting.com> wrote:
Thanks. I did mean something more, but I appreciate the pointer …
P
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*From:* Samantha Eisner [mailto:Samantha.Eisner@icann.org <Samantha.Eisner@icann.org>] *Sent:* Monday, March 23, 2015 5:30 AM *To:* Paul Rosenzweig; 'Jordan Carter'; 'Arun Sukumar' *Cc:* 'Accountability Cross Community' *Subject:* Re: [CCWG-ACCT] Meeting with CCWG Advisors
Hi Paul -
I recognize that you may be discussing a different type of audit than a straight audit of financials, but I thought it was of value to point out that ICANN has, for many years, been subject to an audit of its financial records performed by an independent auditor. Each year’s audited financial statements is available from the ICANN historical financials page at https://www.icann.org/resources/pages/governance/historical-en. The ICANN Board’s Audit Committee oversees the auditor selection and reporting process.
In addition, to the extent the surplus you raise is then placed into a reserve fund, principles for the management of the operating fund and reserve fund are included within ICANN’s investment policy ( https://www.icann.org/resources/pages/investment-policy-2014-07-30-en?routin...), which is regularly reviewed.
Best,
Sam
*From: *Paul Rosenzweig <paul.rosenzweig@redbranchconsulting.com> *Date: *Sunday, March 22, 2015 at 12:57 PM *To: *'Jordan Carter' <jordan@internetnz.net.nz>, 'Arun Sukumar' < arun.sukumar@nludelhi.ac.in> *Cc: *'Accountability Cross Community' < accountability-cross-community@icann.org> *Subject: *Re: [CCWG-ACCT] Meeting with CCWG Advisors
Dear Jordan
This is a very useful point – one, that I’ve been making in other contexts for a while. Two things we should consider requiring:
Conduct and publicly release a five-year forensic audit. Before entrusting ICANN with greater autonomy, it should provide evidence that its financial and management decisions have been sound and comport with accepted business practices.
Conduct an annual outside audit. ICANN should be required to contract with an internationally recognized auditing firm (such as Deloitte, Dettica, PricewaterhouseCoopers, Ernst & Young, or KPMG) to conduct and publicly release an annual audit of the organizations. The costs should be paid by ICANN and the new IANA consortium and the auditing firm should be eligible only if it does not have a pre-existing contract with ICANN.
One other point: If, as seems to be the case, ICANN’s current fee structure creates an excess of income over expenses, thought should be given to requiring a rebate of some sort --- it is not wise for a “non-profit” to routinely run a surplus as that will be an inducement to expand the mission into new areas where the $ can usefully be spent.
Paul
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*From:* Jordan Carter [mailto:jordan@internetnz.net.nz <jordan@internetnz.net.nz>] *Sent:* Sunday, March 22, 2015 9:37 AM *To:* Arun Sukumar *Cc:* Accountability Cross Community *Subject:* Re: [CCWG-ACCT] Meeting with CCWG Advisors
Another question which came up in the discussion this afternoon, is the question of "following the money" - what does economic influence translate into in terms of power within ICANN, and how is the CCWG taking account of this?
It's an important question that I am not sure we've spent much time on yet.
bests
Jordan
On 22 March 2015 at 11:34, Arun Sukumar <arun.sukumar@nludelhi.ac.in> wrote:
Valerie D'Costa, an advisor to the CCWG, raised a couple of interesting and important questions on process and substance. I hope this is a faithful reproduction.
On process:
1. What should be the role of advisors? Should they offer advice on the basis of unanimity or "rough consensus", or just provide input independently?
2. Should advisors restrict their role to responding to questions that have been flagged by the CCWG and routed through the chairs? Or should they/ can they flag issues they feel are important - weighed from their expertise.
On substance:
1. How is the accountability process taking stock of the evolving "global internet community", given that it is going to be driven by numbers from the developing world?
2. Taking off from Q1, is the CCWG evaluating the future capacity of ICANN to be truly representative in the years to come?
arun
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