Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

July 8, 2004

Pitt Voluntarily Adopts Certain ‘Best Practices’ for Auditing

Pitt’s Board of Trustees has modified its audit committee charter, to conform with federal legislation governing public companies’ auditing procedures.

John Elliott, Pitt’s Internal Audit director, reported at the board’s June 25 meeting on the changes, which included voluntarily adopting select best practices recommendations of the Sarbanes-Oxley Act of 2002.

The act only requires public companies to abide by the best practices but Pitt has decided to implement relevant sections of the act, Elliott said. “Technically, it does not apply to the University. So, why are we doing this? The primary reason is that there are certain relevant sections within the act that any organization would want to look at for potential improvements.”

Three groups at Pitt primarily are affected, Elliott said: the independent or external auditor (currently Deloitte & Touche LLP), the trustees audit committee and Pitt’s administration.

Regarding the independent auditor, Pitt now will insist on pre-approval of all audit fees and will rotate audit firms every five years.

The trustees audit committee, which is responsible for the appointment, compensation and oversight of the external auditor, now can engage an independent counsel as necessary to review audits, under changes in the audit committee charter.

In addition, to augment the committee’s responsibility for reviewing internal complaints regarding audit problems, the University has contracted an independent company to operate a hotline, Elliott said. “That hotline will be used by faculty and staff to report concerns they have about financial matters, human resource issues, research compliance matters or other financial-related issues.”

The hotline is expected to be operational in July, and faculty and staff will receive an informational mailing about it. Complaints, which will be investigated by the trustees audit committee, can be filed anonymously, Elliott added.

Sarbanes-Oxley also calls for outside CPAs to certify accounting results, one recommendation the audit committee will not implement. “For our purposes, we’re [going to] leave it as an internal process,” Elliott said. “We’ve developed a series of questions, about 30 in all, about the financial matters related to [University reporting] areas.”

Those questionnaires will go to unit heads to report annually on financial activities in their areas, and that information will be forwarded to the central administration to use in supplying information to the independent auditor, Elliott said.

The trustees audit committee developed its original charter in 2000, as recommended by a 1999 blue ribbon panel of the New York Stock Exchange. These are the first modifications to that charter.

-Peter Hart

Leave a Reply