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Audit Committee (AC) Meeting Minutes

AC Attendees: Erika Mann - Chair; Bill Graham; Gonzalo Navarro and Judith Vazquez

Other Board Attendees: Steve Crocker

Staff Attendees: Akram Atallah – Chief Operating Officer; Xavier Calvez – Chief Financial Officer; John Jeffrey – General Counsel and Secretary; Megan Bishop, Samantha Eisner, and Amy Stathos

  1. Minutes: Approved the minutes of the previous meeting in October 2012.
  2. Review of Prior AC Meeting: The Chair provided an update on the discussion among the remaining AC members after the previous meeting was brought to a close, including further discussion with the independent auditors regarding the work to complete their report.
  3. Overview of Chair discussions in L.A.: The Committee Chair provided a report on her visit to Los Angeles and conversations with staff, the Board Chair, representatives of the independent auditor and the independent financial advisor to the AC. The discussions in L.A. included issues of internal controls, the prioritization of areas where documentation of internal controls is needed, and the creation of a matrix for use in discussions of financial reporting. The AC noted support for the internal control framework and matrix proposal. During the visit, the AC Chair also discussed with staff and others the issue of rotation of audit firms and audit partners as part of best practices, but also resolved to consider timing and resources in making a change in firms. There was also discussion about how the New gTLD Program funds will be reflected in ICANN's financial statements, and the revenue recognition plan to be applied to the New gTLD Program application fees, that is currently under review by large audit firm. The final topic was a discussion regarding the reserve fund and the regulatory constraint to observe a balance between liabilities and the reserve fund.
    • Action:
      • Staff to document ICANN's practice of audit partner/firm rotation as part of the Board process documentation.
      • Staff to prepare, when appropriate, an RFP for audit firms.
      • Staff to notify the AC as soon as the formal opinion is received on the New gTLD funds revenue recognition policy.
  4. Executive Interviews: The AC noted that it is not requesting any interviews with ICANN executives during the Toronto Meeting.
Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as"""" is not an IDN."