Minutes | Board Audit Committee (AC) Meeting
BAC Attendees: Sarah Deutsch, Akinori Maemura, Mike Silber and Lousewies van der Laan (Chair).
Other Board Member Attendees: Avri Doria, Lito Ibarra, Matthew Shears
Invited Observers: Merike Kaeo and Nigel Roberts
ICANN Executives and Staff Attendees: Xavier Calvez (SVP & Chief Financial Officer), Becky Nash (VP, Finance), Aaron Jimenez (Board Operations, Sr. Coordinator), Liz Le (Associate General Counsel), and Amy Stathos (Deputy General Counsel).
Invited Guests: Independent auditors from BDO, LLP.
The following is a summary of discussions, actions taken and actions identified:
Audit Wrap-Up Presentation by Independent Auditors, BDO, LLP – ICANN organization's independent auditors, BDO, LLP provided its wrap-up presentation of the audit of the consolidated financial statements for ICANN org, which includes PTI operations, for the fiscal year ended 30 June 2018. The audit is substantially completed with a few remaining areas to be finalized within the next week. The objective of the audit is to obtain reasonable assurance that the financial statements are free of material misstatement. The audit was conducted in accordance with standards generally accepted in the United States. BDO anticipates that it will issue an unqualified opinion prior to the end of the month.
BDO advised that it was provided with all records and information for inspection and that ICANN org management was cooperative throughout the audit process. BDO reported that the financial statements disclosed all ICANN org's accounting policies, which are consistent with U.S. GAAP, or generally accepted accounting principles, industry practice, and that the policies have been consistently applied. In addition to the overall audit work completed, the auditors also paid special attention to three areas where the organization had to make significant estimates: accounts receivable allowance, new gTLD revenue, and the valuation of investments. BDO noted that the majority of the estimates in these three areas have not changed from year to year, with the exception of new gTLD revenue. This is due to the fact that it has taken longer to complete the program than originally anticipated by ICANN org. As such, the costs and projected revenue realized from the New gTLD Program has been adjusted. BDO reviewed ICANN org's estimates for this process as well as the accounting that was applied by ICANN org, and concluded that the changes are appropriate.
BDO reported that its evaluation of the revenue recognition results, the general and administrative expenses, and payroll expenses appear reasonable. Likewise, the accounts receivable and allowances appear reasonable. Regarding investments, BDO determined that the investments, investment income, and realized gains and losses were properly stated and reasonably valued. BDO reported that the areas of cash and cash equivalents, as well as net asset classification were properly stated.
With respect to PTI, BDO reported that the operations and expenses incurred appear to be reasonable.
The BAC then convened a confidential session with the auditors.
Review of Draft FY18 Audited Financial Statements – The BAC noted that it did not have any questions about the current draft FY18 Audited Financial Statements, which the BAC members had already reviwed along with the full Board. The BAC discussed next steps in the process for completion of the FY18 Audited Financial Statements.
Any Other Business
The BAC discussed the status of executive interviews and next steps. The BAC discussed the purpose of the interviews, which is to identify any issues related to the financial statements or internal controls that could reflect on the financial statements.
The BAC thanked Lousewies van der Laan and Mike Silber for their service.
Published on 12 November 2018