This sample memo serves as a report of an internal audit function’s high-level assessment of the company’s incentive compensation process.

In this sample, at the beginning of each fiscal year, the company board of trustees (board) reviews and approves specific key performance indicators (KPIs) recommended by the governance committee to be utilized during the current year to measure and determine whether goals have been met, the specific level to which they have been met, and to calculate payout amounts based on these results.