31. Duties. The audit committee should perform all duties determined by the institution's board of directors and it should maintain minutes and other relevant records of its meetings and decisions. The duties of the audit committee should be appropriate to the size of the institution and the complexity of its operations, and, at a minimum, should include the appointment, compensation, and oversight of the independent public accountant; reviewing with management and the independent public accountant the basis for their respective reports issued under 363.2 and (b) and 363.3(a) and (b); reviewing and satisfying itself as to the independent public accountant's compliance with the required qualifications for independent public accountants set forth in 363.3(f) and (g) and guidelines 13 through 16; ensuring that audit engagement letters comply with the provisions of 363.5(c) before engaging an independent public accountant; being familiar with the notice requirements in 363.4(d) and guideline 20 regarding the selection, change, or termination of an independent public accountant; and ensuring that management sends a copy of any notice required under 363.4(d) to the independent public accountant when it is filed with the FDIC. Appropriate additional duties could include:
(a) Reviewing with management and the independent public accountant the scope of services required by the audit, significant accounting policies, and audit conclusions regarding significant accounting estimates;
(b) Reviewing with management and the accountant their assessments of the effectiveness of internal control over financial reporting, and the resolution of identified material weaknesses and significant deficiencies in internal control over financial reporting, including the prevention or detection of management override or compromise of the internal control system;
(c) Reviewing with management the institution's compliance with the Designated Laws and Regulations identified in guideline 7A;
(d) Discussing with management and the independent public accountant any significant disagreements between management and the independent public accountant; and
(e) Overseeing the internal audit function.