Minutes of the Meetings of the Audit Committee of the Internet Society

A meeting of the Audit Committee of the Internet Society (ISOC) was held on Wednesday, February 29, 2012 at 13:00 UTC. In attendance was Eric Burger, Chair of the Audit Committee. Khaled Koubaa joined for the executive session.

Also in attendance were Lynn St.Amour, ISOC’s President and Chief Executive Officer, Greg Kapfer, Chief Financial Officer, Sandy Spector, Finance Director, Lisa Lipsky, Audit Partner at Grant Thornton and David Green, Audit Manager at Grant Thornton.

Call to Order

Eric called the meeting to order.

Review of Grant Thornton’s Audit Plan

Ms. Lipsky walked through Grant Thornton’s 2012 Audit Plan. Ms. Lipsky reviewed the responsibilities of Grant Thornton, the Audit Committee and ISOC management. Ms. Lipsky then outlined the timeline for the 2012 audit.

Mr. Green discussed Grant Thornton’s audit methodology for risk assessment and materiality.

Ms. Lipsky explained either total revenues or total assets were used most often for non- profit companies to calculate materiality. Grant Thornton believes total revenue is the proper benchmark for ISOC.

Mr. Green reviewed significant risk areas, including potential for fraud, that will be reviewed by Grant Thornton during the audit. Eric stated the Audit Committee was extremely sensitive to fraud or even the appearance of impropriety. Ms. Lipsky explained how Grant Thornton would address this during the audit, including a more detailed journal entry review.

Sandy then addressed implementation of the 2010 internal control recommendation stating that currently only IT personnel had administrative rights to the accounting system. Sandy also outlined her review of accounting entries between the time of that recommendation and implementation of a third party IT administration, which will be further reviewed with Grant Thornton during the audit. While the access to the accounting system has been delegated outside of the accounting department, and all journal entries have been subsequently audited, ISOC’s accounting system does not provide a log history of changes to administrative rights.

Ms. Lipsky indicated this lack of a basic internal control was a less than ideal, but that the lack of such an administrative audit history was common in some company accounting packages.

Ms. Lipsky discussed Grant Thornton’s required deliverables and communications to the Audit Committee. Ms. Lipsky then reviewed an ethics hotline provided by Grant Thornton for use by Audit Committee members to facilitate communications of any potential violations on the part of Grant Thornton. She clarified the hotline is not for Internet Society reporting and that we can continue to use our system that is in place.

Eric then called for an executive session and Lynn, Greg and Sandy left the meeting.

Ms. Lipsky reported that management has been cooperative and proactive in getting clarification when necessary. She reported there were no indications of any issues to report to the Audit Committee at this time.