Audit Committee
The Audit Committee assists the Board of Directors in meeting its
fiduciary oversight and related obligations in relation to financial
management and reporting and related matters to ensure the
organization is managed in the best interest of its mission.
Composition
The Committee is to be comprised of 3 - 5 Directors, the majority of
whom will meet the standard of financial literacy.
A member is considered “financially literate” if they have the ability to
read and understand a set of financial statements that present a
breadth and level of complexity of accounting issues commonly
reflected in Quarry’s financial statements.
Committee members will be recommended for Board approval by the
Governance Committee and the Board Chair. Members will serve for
one-year terms. The Board may reappoint any or all members of the
Committee for additional one-year terms.
Meeting Schedule and Frequency
The Committee will meet four times per year and additional times as
needed to carry out its duties effectively as determined by the
Committee Chair.
Boundaries
The following define the limits of the freedom of the authority of this
position. In its governance of FaithLife Financial, the Committee may
not:
1. Give management direction to the CEO or the CEO’s staff.
2. Change or contravene the Letters Patent, Bylaws or other related
requirements.
3. Violate applicable legislation and/or the regulatory requirements.
Responsibilities
The Committee fulfills its purpose by carrying out the following duties:
A. Integrity of the Financial Reporting Process and Financial
Statements
1. Approving accounting and financial reporting practices annually.
2. Reviewing quarterly financial results against budget.
3. Recommending for Board approval the quarterly and annual
financial statements.
4. Developing a policy on an approach to meeting its disclosure and
communications obligations to its stakeholders.
5. Reviewing communications to stakeholders for Board approval
with a view to ensuring appropriate financial reporting.
6. Reviewing and assessing proposed changes to accounting
standards and their implications for financial reporting.
7. Reviewing the committee’s mandate annually and revise as
deemed appropriate.
B. System of Internal Control and Disclosures
1. Monitoring internal control over financial reporting and
information systems to obtain assurance they are operating
effectively.
2. Reviewing with the Chief Financial Officer the scope and the
results of any evaluation of internal controls.
3. Reviewing with the External Auditor the scope and the results of
their evaluation of internal controls.
4. Reviewing the management letters received from the External
Auditor.
5. Reviewing internal control certifications and disclosures signed
off by the CEO and the Chief Financial Officer, along with an
overview of the process leading up to certification.
6. Reviewing reports summarizing Director and Management travel
and expense claims.
C. Risk Management and Fraud Risk Management
1.
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5.
Review the risk profile and risk mitigation strategies.
Receive updates on status of key risks.
Monitoring processes and systems to address the risk of fraud.
Reviewing insurance coverage of significant business risks.
Reviewing any legal claims.
D. Audit Services Function
1. Approving internal audit plans.
2. Reviewing the CFO hiring and succession recommendations.
3. Reviewing audit reports prepared by the Chief Financial Officer
together with Management's responses and follow-ups to issues
resulting from these reports.
4. Ensuring open communication occurs among the Audit
Committee, the External Auditor and the Chief Financial Officer.
E. External Review of the Financial Statements
1. Recommending to the Board the appointment of the External
Auditor, including the engagement term and remuneration.
2. Reviewing with the External Auditor any significant changes in
financial reporting and accounting practices.
F. Monitoring Compliance with Laws, Regulations and Code of
Conduct
1. Monitoring compliance with applicable laws, legislation and
industry or regulatory requirements, and where non-compliance
exists receiving reports of steps taken, or to be taken, to
address the matter.
2. Approving the Code of Conduct and ensuring appropriate director
and employee training and acknowledgment processes exist.
Where breaches have been identified by Management, ensuring
that steps are taken to address them.
3. Reviewing complaints or tips from employees relating to ethical
matters, ensuring a confidential mechanism exists to facilitate
reporting to the Committee, and ensuring that action is taken in
a timely manner.
Committee Leadership
The role of the Committee Chair is to:
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Foster a constructive tone so that the Committee works as a
cohesive team.
Assist the Board Chair in developing and fostering a healthy
Board culture.
Promote the independent thinking and decision-making of the
Committee.
Build consensus among Committee members.
Ensure meeting time is used effectively.
Monitor Committee activities to ensure the work undertaken is
consistent with the mandate and does not interfere with
Management’s responsibilities.
Work in conjunction with Management to ensure that the
Committee fulfills its mandate and completes its work plan
efficiently and effectively.
Move Committee discussion towards a constructive and timely
resolution.
Reporting and Accountability to the Board
Following each Committee meeting, report verbally to the Board at the
next scheduled meeting on the activities, findings and any
recommendations of the Committee.
Other
The Committee will:
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Retain external advisors to provide needed expertise and any
other support as required or deemed appropriate, following the
Board-approved selection process.
Ensure members are provided with the appropriate resources
and education to fulfill the Committee’s responsibilities.
Annually evaluate the Committee’s performance in fulfilling its
mandate and report findings to the Board.