[CCWG-ACCT] Meeting with CCWG Advisors

Mon Mar 23 13:27:50 UTC 2015

Maintaining an effective system of internal controls is vital for
achieving a company's business objectives, obtaining reliable
financial reporting on its operations, preventing fraud and
misappropriation of its assets, and minimizing its cost of capital.
Both internal and independent auditors contribute to a company's audit
system in different but important ways.

Having an effective audit system is important for a ICANN because it
enables it to pursue and attain its various corporate objectives.
ICANN processes need various forms of internal control to facilitate
supervision and monitoring, prevent and detect irregular transactions,
measure ongoing performance, maintain adequate business records and to
promote operational productivity. Internal auditors review the design
of the internal controls and informally propose improvements, and
document any material irregularities to enable further investigation
by management if it is warranted under the circumstances.

Without a system of internal controls or an audit system, a ICANN
would not be able to create reliable reports for internal and external
purposes. Thus, it would not be able to determine how to allocate its
resources and would be unable to know which of its segments or product
lines. Additionally, it could not manage its affairs, as it would not
have the ability to tell the status of its assets and liabilities and
would be rendered undependable in the marketplace due to its inability
to consistently produce its services in a reliable fashion.
Accordingly, an audit system is crucial in preventing debilitating
misstatements in a ICANN's records and reports.

In this regard i am in agreement with Seuns Statement

On 3/23/15, Seun Ojedeji <seun.ojedeji at gmail.com> wrote:
> I beg to differ Carrie, I don't understand the rationale behind your claim
> that an audit will lack independence (credibility) because ICANN is paying.
> Please tell me which audit company does free auditing without being
> paid....most organisations that use external auditors pay them from the
> same company money and that does not diminish the vl credibility of the
> report.
>
> I think we may be introducing so much unrealistic examples in this process.
>
> Regards
>
> sent from Google nexus 4
> kindly excuse brevity and typos.
> On 23 Mar 2015 12:40, "Carrie" <carriedev at gmail.com> wrote:
>
>> The fact that ICANN's Board oversees the audit is a statement that the
>> audit is NOT an independent independent audit. Does ICANN pay for that
>> audit too? I expect they do hence people that pay tend to get the results
>> they seek so from the contractor wanting more work hence the question of
>> the auditing entity, do they do work for Board members and other related
>> affiliates and associations too.
>>
>> Sincerely
>> Carrie Devorah
>> Www.centerforcopyrightintrgrity.com
>>
>> Sent from my iPhone
>>
>> On Mar 23, 2015, at 5:46 AM, "Paul Rosenzweig" <
>> paul.rosenzweig at redbranchconsulting.com> wrote:
>>
>> Thanks.   I did mean something more, but I appreciate the pointer …
>>
>> P
>>
>>
>>
>> Paul Rosenzweig
>>
>> paul.rosenzweig at redbranchconsulting.com
>> <paul.rosenzweigesq at redbranchconsulting.com>
>>
>> O: +1 (202) 547-0660
>>
>> M: +1 (202) 329-9650
>>
>> VOIP: +1 (202) 738-1739
>>
>> Skype: paul.rosenzweig1066
>>
>> Link to my PGP Key
>> <http://www.redbranchconsulting.com/index.php?option=com_content&view=article&id=19&Itemid=9>
>>
>> <image002.jpg>
>> <http://www.rsaconference.com/events/us15/register?utm_source=inhouse&utm_medium=email&utm_campaign=signature-us2015>
>>
>>
>>
>> *From:* Samantha Eisner [mailto:Samantha.Eisner at icann.org
>> <Samantha.Eisner at icann.org>]
>> *Sent:* Monday, March 23, 2015 5:30 AM
>> *To:* Paul Rosenzweig; 'Jordan Carter'; 'Arun Sukumar'
>> *Cc:* 'Accountability Cross Community'
>> *Subject:* Re: [CCWG-ACCT] Meeting with CCWG Advisors
>>
>>
>>
>> Hi Paul -
>>
>>
>>
>> I recognize that you may be discussing a different type of audit than a
>> straight audit of financials, but I thought it was of value to point out
>> that ICANN has, for many years, been subject to an audit of its financial
>> records performed by an independent auditor.  Each year’s audited
>> financial
>> statements is available from the ICANN historical financials page at
>> https://www.icann.org/resources/pages/governance/historical-en.  The
>> ICANN Board’s Audit Committee oversees the auditor selection and
>> reporting
>> process.
>>
>>
>>
>> In addition, to the extent the surplus you raise is then placed into a
>> reserve fund, principles for the management of the operating fund and
>> reserve fund are included within ICANN’s investment policy (
>> https://www.icann.org/resources/pages/investment-policy-2014-07-30-en?routing_type=path),
>> which is regularly reviewed.
>>
>>
>>
>> Best,
>>
>>
>>
>> Sam
>>
>>
>>
>> *From: *Paul Rosenzweig <paul.rosenzweig at redbranchconsulting.com>
>> *Date: *Sunday, March 22, 2015 at 12:57 PM
>> *To: *'Jordan Carter' <jordan at internetnz.net.nz>, 'Arun Sukumar' <
>> arun.sukumar at nludelhi.ac.in>
>> *Cc: *'Accountability Cross Community' <
>> accountability-cross-community at icann.org>
>> *Subject: *Re: [CCWG-ACCT] Meeting with CCWG Advisors
>>
>>
>>
>> Dear Jordan
>>
>>
>>
>> This is a very useful point – one, that I’ve been making in other
>> contexts
>> for a while.  Two things we should consider requiring:
>>
>>
>>
>> Conduct and publicly release a five-year forensic audit. Before
>> entrusting
>> ICANN with greater autonomy, it should provide evidence that its
>> financial
>> and management decisions have been sound and comport with accepted
>> business
>> practices.
>>
>>
>>
>> Conduct an annual outside audit. ICANN should be required to contract
>> with
>> an internationally recognized auditing firm (such as Deloitte, Dettica,
>> PricewaterhouseCoopers, Ernst & Young, or KPMG) to conduct and publicly
>> release an annual audit of the organizations. The costs should be paid by
>> ICANN and the new IANA consortium and the auditing firm should be
>> eligible
>> only if it does not have a pre-existing contract with ICANN.
>>
>>
>>
>> One other point:  If, as seems to be the case, ICANN’s current fee
>> structure creates an excess of income over expenses, thought should be
>> given to requiring a rebate of some sort --- it is not wise for a
>> “non-profit” to routinely run a surplus as that will be an inducement to
>> expand the mission into new areas where the $ can usefully be spent.
>>
>>
>>
>> Paul
>>
>>
>>
>> Paul Rosenzweig
>>
>> paul.rosenzweig at redbranchconsulting.com
>> <paul.rosenzweigesq at redbranchconsulting.com>
>>
>> O: +1 (202) 547-0660
>>
>> M: +1 (202) 329-9650
>>
>> VOIP: +1 (202) 738-1739
>>
>> Skype: paul.rosenzweig1066
>>
>> Link to my PGP Key
>> <http://www.redbranchconsulting.com/index.php?option=com_content&view=article&id=19&Itemid=9>
>>
>> <image003.jpg>
>> <http://www.rsaconference.com/events/us15/register?utm_source=inhouse&utm_medium=email&utm_campaign=signature-us2015>
>>
>>
>>
>> *From:* Jordan Carter [mailto:jordan at internetnz.net.nz
>> <jordan at internetnz.net.nz>]
>> *Sent:* Sunday, March 22, 2015 9:37 AM
>> *To:* Arun Sukumar
>> *Cc:* Accountability Cross Community
>> *Subject:* Re: [CCWG-ACCT] Meeting with CCWG Advisors
>>
>>
>>
>> Another question which came up in the discussion this afternoon, is the
>> question of "following the money" - what does economic influence
>> translate
>> into in terms of power within ICANN, and how is the CCWG taking account
>> of
>> this?
>>
>>
>>
>> It's an important question that I am not sure we've spent much time on
>> yet.
>>
>>
>>
>> bests
>>
>> Jordan
>>
>>
>>
>>
>>
>> On 22 March 2015 at 11:34, Arun Sukumar <arun.sukumar at nludelhi.ac.in>
>> wrote:
>>
>> Valerie D'Costa, an advisor to the CCWG, raised a couple of interesting
>> and important questions on process and substance. I hope this is a
>> faithful
>> reproduction.
>>
>>
>>
>> On process:
>>
>>
>>
>> 1. What should be the role of advisors? Should they offer advice on the
>> basis of unanimity or "rough consensus", or just provide input
>> independently?
>>
>>
>>
>> 2. Should advisors restrict their role to responding to questions that
>> have been flagged by the CCWG and routed through the chairs? Or should
>> they/ can they flag issues they feel are important - weighed from their
>> expertise.
>>
>>
>>
>> On substance:
>>
>>
>>
>> 1. How is the accountability process taking stock of the evolving "global
>> internet community", given that it is going to be driven by numbers from
>> the  developing world?
>>
>>
>>
>> 2. Taking off from Q1, is the CCWG evaluating the future capacity of
>> ICANN
>> to be truly representative in the years to come?
>>
>>
>>
>> arun
>>
>>
>>
>> --
>>
>> -
>>
>> @arunmsukumar <http://www.twitter.com/arunmsukumar>
>>
>> Senior Fellow, Centre for Communication Governance
>> <http://www.ccgdelhi.org>
>>
>> National Law University, New Delhi
>>
>> Ph: +91-9871943272
>>
>>
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>>
>>
>>
>>
>>
>> --
>>
>> Jordan Carter
>>
>> Chief Executive
>> *InternetNZ*
>>
>> 04 495 2118 (office) | +64 21 442 649 (mob)
>> jordan at internetnz.net.nz
>> Skype: jordancarter
>>
>> *A better world through a better Internet *
>>
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>

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