Audit Committee
Strengthening the Audit Committee Print E-mail
Written by C. Meyrick Payne of Management Practice Inc. with the assistance of Joseph Fleming and Garry Moody   

The purpose of this MPI Bulletin is to provide mutual fund directors with some practical guidelines as to their responsibilities and authority for strengthening the Audit Committee.

Truth is that Audit Committee members are under increasing scrutiny. The quality of financial reports is at stake. Uniquely in mutual funds, the Fund's financial staff and systems directly determine the price at which investors buy and sell their mutual fund shares, the net asset value or NAV. Mistakes, deliberate or inadvertent, cause some investors to lose money and opens the gates to expensive lawsuits and substantial damages.

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The Fund Director's Role in an SEC Examination Print E-mail
Written by C. Meyrick Payne   

The purpose of this MPI Bulletin is to help mutual fund directors think through their responsibilities in connection with an SEC Examination. A panel of mutual fund experts, including an independent director and a representative from the SEC, convened under the auspices of Fund Directions to discuss this issue.

First and foremost, the new SEC Chairman, Harvey Pitt, has emphasized that the SEC is service organization, where there is no inherent virtue in playing "Gotch ya!" He has spoken eloquently about building a partnership with the accounting profession to cooperatively enforce the law and bring abnormalities to light. The panel concluded that the routine listing of inconsequential record keeping deficiencies would play a major part in future SEC examinations. On the other hand, substantive departures from sound business practices, particularly those that reflect veniality and disservice to public investors is not to be tolerated. The success of the mutual fund industry is, in large part, based on the confidence that investors have in the mutual fund industry.

 

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