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accounting, auditing, and financial reporting needed to understand and resolve issues raised by the independent audit of the financial state- ments. Amajority of the members of the audit committee should be selected from outside of management, and should include at least one representative each from the executive and legis- lative branches of the government. The audit committee should be sufficiently large to ensure that its members possess all of the skills needed to realize the committee's objectives. At the same time, it should be small enough to operate effi- ciently. Therefore, as a general rule, GFOA rec- ommends that an audit committee be composed of no less than five and no more than seven members. In addition to periodic meetings, it is recom- mended that the audit committee present annu- ally to the governing board and management a written report of how it has discharged its duties and met its responsibilities. It is further recom- mended that this report be made public. 48 AN ELECTED OFFICIAL'S GUIDE ~1~II)ITI1~lG ~~SI~'~ What is an audit? An audit can be defined as the systematic exami- nation of the assertions or actions of a third party to evaluate conformance to some norm or benchmark. In this broad sense, many different types of audits are commonly encountered in the public sector. Tax auditors, for example, scruti- nize the returns of taxpayers for compliance with applicable laws and regulations. Fraud auditors investigate indications of possible irregularities. Similarly, government employees often perform preaudits of vendor payments to ensure that there is proper documentation and approval be- fore payment is made. While all of these and many other activities can properly be described as audits, this booklet will direct its attention more narrowly on those au- dits conducted in accordance with certain nation- ally recognized standards. 1