Audit Committee Charter

1. PURPOSE
The purpose of this document is to outline the role, responsibilities, composition and operating guidelines
of the Audit Committee of XYZ Institution (the Committee).
2. AUTHORITY AND INDEPENDENCE
The Committee is directly accountable to the Accounting fficer ! Authority. In discharging its
responsibilities, the Committee has authority to"
conduct or authori#e in$estigations into any matters %ithin its scope of responsibility&
access information, records and personnel as it re'uires to fulfill its responsibilities&
re'uest the attendance of any e(ecuti$e or employee, at Committee meetings&
conduct meetings %ith )(ternal Auditors (Auditor*+eneral) and Internal Auditors as necessary&
obtain ad$ice from e(ternal parties as necessary&
,esol$e any disagreements bet%een management and the auditor regarding financial reporting&
and
-re*appro$e all auditing and non*audit ser$ices.
3. ROLE
The role of the Committee is to pro$ide independent assurance and assistance to the Accounting fficer !
Authority on control, go$ernance and ris. management. The Committee does not replace established
management responsibilities and delegations. The Committee %ill pro$ide the Accounting fficer !
Authority %ith prompt and constructi$e reports on its findings, especially %hen issues are identified that
could present a material ris. to the Institution.
4. COPOSITION
The Committee consists of XX members %ho are all independent of the Institution. The Committee is
constituted so as to ensure independence and its membership %ill be disclosed in the annual report of the
Institution. The Committee collecti$ely (not necessarily indi$idually) has an understanding of"
go$ernment en$ironment and accountability structures&
go$ernance processes %ithin the Institution&
financial reporting&
ris. management&
internal control&
e(ternal audit process&
Internal audit process&
legal process& and
information technology.
ne member of the Committee has e(pertise in the industry in %hich the Institution operates. /ember
terms and conditions are disclosed in the letter of appointment.
The Chairperson of the Committee is appointed by the Accounting fficer ! Authority. The Chairperson
possesses sound communication and strong leadership s.ills.
!. EETIN"S
The Committee %ill meet at least four times a year, %ith authority to con$ene additional meetings, as
circumstances re'uire and schedule of meetings %ill be agreed in ad$ance. All Committee members are
e(pected to attend each meeting, in person or $ia accepted communication tool. A 'uorum %ill consist of
XX members for each meeting to be duly constituted. The Committee meetings %ill normally be attended
by the Chief 0inancial fficer, Chief Audit )(ecuti$e, Chief ,is. fficer and representati$es from the
Auditor*+eneral, ho%e$er, the Committee may in$ite members of /anagement or other rele$ant parties
to attend meetings and pro$ide pertinent information, as necessary. The Committee %ill determine its
o%n agenda, ensuring appropriate consultation to include emerging issues and emphasis on the most
significant ris.s.
The Accounting fficer ! Authority %ill appoint a secretary ! secretariat function to facilitate the
Committee1s meetings and reporting duties. The secretary %ill in consultation %ith the Chairperson,
prepare and send notices and meetings pac.s XX %or.ing days before the meeting. The secretary %ill
also prepare minutes and accurately transcribe all decisions of the Committee.
#. RESPONSI$ILITIES
The Committee is accountable to the Accounting fficer ! Authority for the e(ercise of its responsibilities.
The Committee %ill at all times, recogni#e that the primary responsibility for management of XYZ
Institution rests %ith the Accounting fficer ! Authority. The committee %ill carry out the follo%ing
responsibilities"
%i&a&'ia( Stateme&t)
,e$ie% the appropriateness of accounting policies&
,e$ie% the appropriateness of assumptions made by /anagement in preparing the financial
statements&
,e$ie% the significant accounting and reporting issues, and understand their impact on the financial
statements.
,e$ie% the annual financial statements, and consider %hether they are complete, consistent %ith
prescribed accounting and information .no%n to Committee members&
btain assurance from /anagement %ith respect to the accuracy of the financial statements&
,e$ie% %ith management and the e(ternal auditors the results of e(ternal audit, including any
significant issues identified& and
,e$ie% the annual report and related regulatory filings before release and consider the accuracy and
completeness of the information.
Ri)* a&a+eme&t
Reference may be made to areas already covered by a separate Risk Management Committee.
,e$ie% the ris. management frame%or. for identifying, assessing, monitoring and managing
significant ris.s&
,e$ie% the report of significant changes to the Institution1s ris. register&
,e$ie% the report on ris. management culture of the Institution&
2iaise %ith /anagement to ensure that there is a common understanding of the .ey ris.s to the
Institution&
,e$ie% %hether ris. management is carried out in a manner that really benefits the Institution&
Assess and contribute to the audit planning processes relating to the ris.s of the Institution&
,e$ie% and recommend disclosures on matters of ris. in the annual financial statements&
,e$ie% and recommend disclosures on matters of ris. and ris. management in the annual report&
-ro$ide regular feedbac. to the Accounting fficer ! Authority on the ade'uacy and effecti$eness of
ris. management in the Institution, including recommendations for impro$ement& and
3atisfy itself that it has appropriately addressed the follo%ing areas"
o financial reporting ris.s, including the ris. of fraud&
o internal financial controls& and
o IT ris.s as they relate to financial reporting.
I&ter&a( Co&tro(
,e$ie% the ade'uacy of the internal control system, including information technology security and
control&
4nderstand the scope of internal and e(ternal auditors5 re$ie% of internal control o$er financial
reporting, and obtain reports on significant findings and recommendations, together %ith
management5s responses&
,e$ie% %hether rele$ant policies and procedures are in place and up to date, and %hether they are
complied %ith& and
,e$ie% %hether the financial internal controls are operating efficiently, effecti$ely and economically.
Per,orma&'e a&a+eme&t
,e$ie% the Institution1s compliance %ith the performance management and reporting systems&
,e$ie% %hether performance management systems reflect the Institution1s purpose and ob6ecti$es&
and
,e$ie% %hether the performance reporting and information uses appropriate targets and
benchmar.s.
I&ter&a( Audit
,e$ie% the Internal Audit Charter, budget, acti$ities, staffing, s.ills and organi#ational structure of the
Internal Audit&
,e$ie% and appro$e the Internal Audit plan, its scope and any ma6or changes to it, ensuring that it
co$ers the .ey ris.s and that there is appropriate co*ordination %ith the )(ternal Auditor (Auditor*
+eneral&
,e$ie% and concur in the appointment, replacement, or dismissal of the Chief Audit )(ecuti$e (CA))&
,esol$e any difficulties or un6ustified restrictions or limitations on the scope of Internal Audit %or.&
,esol$e any significant disagreements bet%een Auditors and /anagement&
,e$ie% significant findings and recommendations by Internal Audit and /anagement responses
thereof&
,e$ie% implementation of Internal Audit recommendations by /anagement&
,e$ie% the performance of the CA)&
,e$ie% the effecti$eness of the Internal Audit function, including compliance %ith The Institute of
Internal Auditors5 International 3tandards for the -rofessional -ractice of Internal Auditing& and
/eet separately %ith the CA) to discuss any issues that the Committee or Internal Audit belie$es
should be discussed pri$ately.
E-ter&a( Audit
,e$ie% the e(ternal auditors5 proposed audit scope, approach and audit fees for the year&
,e$ie% the findings and recommendations by )(ternal Auditor and /anagement responses thereof&
,e$ie% implementation of )(ternal Auditor1s recommendations by /anagement&
,e$ie% the performance of )(ternal Auditors&
)nsure that the is proper coordination of audit efforts bet%een Internal and )(ternal Auditors& and
/eet separately %ith the )(ternal Auditors to discuss any matters that the Committee or )(ternal
Auditors belie$e should be discussed pri$ately.
Com.(ia&'e
,e$ie% %hether /anagement has considered legal and compliance ris.s as part of the Institution1s
ris. assessments&
,e$ie% the effecti$eness of the system for monitoring compliance %ith la%s and regulations&
,e$ie% the findings of any e(aminations by regulatory agencies, and any auditor obser$ations&
,e$ie% the process for communicating the code of conduct to the Institution1spersonnel, and for
monitoring compliance there%ith& and
btain regular updates from /anagement regarding compliance matters.
Re.orti&+ Re).o&)i/i(itie)
,egularly report to the Accounting fficer ! Authority about Committee acti$ities, issues, and related
recommendations&
,eport annually to the Accounting fficer ! Authority, describing the Committee5s composition,
responsibilities and ho% they %ere discharged, and any other information re'uired, including appro$al
of non*audit ser$ices&
3ubmit a summary of its acti$ities for inclusion in the annual report& and
,e$ie% any other reports the Institution issues that relate to Committee responsibilities.
Other Re).o&)i/i(itie)
-erform other acti$ities related to this Charter as re'uested by the Accounting fficer ! Authority.
3afeguard all the information supplied to it %ithin the ambit of the la%&
In$estigate matters %ithin its po%ers as identified in this Charter& and
Confirm annually that all responsibilities outlined in this Charter ha$e been carried out.
0. E1ALUATION O% COITTEE ACTI1ITIES
The Committee %ill annually underta.e self assessment on its performance. The Chairperson %ill pro$ide
each member %ith feedbac. on that member1s contribution to the Committee1s acti$ities at least once
during a member1s term of office. The assessment %ill include training needs for each Committee
member.
2. RE1IE3 O% THE CHARTER
The Committee %ill annually re$ie% its Charter to ensure that it remains rele$ant %ith the Committee1s
authority, ob6ecti$es and responsibilities. All changes or amendments to the Charter %ill be discussed
and appro$ed by the Accounting ! fficer.
4. APPRO1AL O% THE CHARTER
XYZ Institution Audit Committee Charter is endorsed by the Chairperson of the Committee and appro$ed
by the Accounting fficer ! Authority.
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7ame" 7ame"
Audit Committee Chairperson Accounting fficer ! Authority
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