REACH Audit Committee Charter
The primary functions of the Audit Committee are to:
- Assist the Board in its oversight of the reliability and integrity of accounting policies and financial reporting and disclosure practices;
- Provide advice to the Board on financial statements, due diligence, financial systems integrity and business risks to enable the Board to fulfil its fiduciary and stewardship obligations; and
- Assist the Board in establishing and maintaining processes to ensure that there is:
- compliance with all applicable laws, regulations and company policies;
- an adequate system of internal control, management of business risks and safeguard of assets; and
- an independent channel for notification, investigation and handling of grievance and complaints within the company.
In addition, the Audit Committee, not REACH management, is responsible for approving all audit engagement fees and terms, as well as all non-audit engagements by REACH's external auditors.
In accordance with corporate governance best practice:
- The Audit Committee is comprised of at least 3 members who:
- are independent of REACH management; and
- have a working familiarity with basic finance and accounting practices;
- At least one member of the Audit Committee has accounting or related financial management expertise;
- Audit Committee members may only receive the following compensation from REACH:
- director's fees, which may be received in cash, shares, superannuation contributions or other in-kind consideration ordinarily available to non-executive directors; and
- any other regular benefits that other REACH non-executive directors receive;
- The Chairman of the Audit Committee is not the Chairman of the Board of Directors; and
- The CEO is not a member of the Audit Committee.
The Audit Committee meets at least two times per year, or more frequently as circumstances require. Board members are entitled to attend Audit Committee meetings by arrangement with the Chairman of the Audit Committee. However, the Audit Committee may meet separately with the CEO, management, the director of the REACH internal auditing department and other executives, and the independent external auditor in relation to matters that it wishes to discuss privately. The Audit Committee must, annually, meet separately with the internal auditor and independent external auditors, with and without management present.
The Audit Committee has the responsibility for:
- Appointing, evaluating and, where appropriate, replacing the external auditor; and
- Authorizing any non-audit engagements of the external auditors.
REACH's external auditors are not authorized to perform any of the following prohibited non-audit services:
- Bookkeeping services and other services related to preparing REACH's accounting records or financial statements;
- Financial information system design and implementation services;
- Appraisal or valuation services, fairness opinions, or contribution-in-kind reports;
- Actuarial services;
- Internal audit services;
- Management functions or human resources;
- Broker or dealer, investment adviser, or investment banking services; and
- Legal services or expert services unrelated to the audit.
All other non-audit services may only be provided if:
- The Audit Committee has expressly approved the provision of the non-audit service; and
- The performance of the non-audit service will not cause the external auditor's total revenue from non-audit work to exceed the amount determined by the Audit Committee to be the cap on non-audit services.
The Audit Committee must not approve the provision of a non-audit service by the external auditors if the provision of the service would compromise the auditor's independence.
The Audit Committee has the authority to select, retain, terminate and approve the fees and other retention terms of special or independent counsel, accountants or other experts, as it deems appropriate, without seeking approval of the Board or management.
Last updated on February 2004