Annual Report of the Audit Committee of the Board 2007-2008

Board of Directors Audit Committee ANNUAL REPORT OF THE AUDIT COMMITTEE OF THE BOARD 2007-2008 4 September 2008 I. BACKGROUND AND OVERVIEW 1. In line with Article 31 of the Agreement Establishing the Asian Development Bank (ADB) and Section 12 of the By-Laws, the Audit Committee of the Board (ACB) assists the Board of Directors in carrying out its responsibilities as they relate to the oversight of ADB’s financial reporting and audits, including internal controls. 2. During the period covered by this report (1 July 2007 to 30 June 2008), the ACB continued to operate under the Terms of Reference (Appendix 1) approved by the Board of Directors in April 2005. The ACB agreed with the findings of ADB’s Outside Auditor which concluded that the balance sheets and the related statements of income and expenses, cash flows, and changes in capital and reserves present fairly, in all material aspects, the financial position of ADB. 3. The ACB identified a range of issues which formed the basis of its Work Program (Appendix 2). The ACB reviewed a series of key issues and actions for the reporting period, which are summarized as follows: (i) Review of the Annual Financial Statements and Management's Discussion and Analysis (MD&A) (with ADB’s Outside Auditor), and Quarterly Financial Statements; (ii) Review of Ordinary Capital Resources (OCR) operating income and net income; (iii) ...