Board Audit Committee Charter

Transcription

1 Board Audit Committee Charter 1. OBJECTIVE 1.1 The main objective of the Board Audit Committee (the Committee or BAC ) is to assist the Boards of Voting Directors of Macquarie Group Limited ( Macquarie ) and Macquarie Bank Limited ( the Bank ), in fulfilling the Boards responsibility for oversight of the quality and integrity of the accounting, auditing and financial reporting of the Macquarie Group (the Group ) including: exercising oversight over the compliance of the financial statements with the requirements of the Corporations Act 2001 (Cth) (the Act ) and other mandatory professional reporting requirements, including the Australian Prudential Regulation Authority ( APRA ) statutory reporting requirements, as well as making informed decisions regarding accounting and regulatory policies, judgements, practices and disclosures; reviewing the adequacy of the Group s control framework for financial regulatory reporting to APRA and banking regulators in other jurisdictions; reviewing the scope and results of Internal Audit reviews and external audits; assessing the effectiveness of the Group s internal controls in relation to accounting and financial records and reporting, referring matters relating to the duties and responsibilities of the Board Risk and Board Governance and Compliance Committees to the appropriate Committee; and assessing the effectiveness of Internal Audit in carrying out the responsibilities of its charter. 2. ALLOCATION OF RESPONSIBILITIES BETWEEN BOARD COMMITTEES 2.1 The allocation of responsibilities between Board Committees is described in the Macquarie Board Charter. 3. ADMINISTRATION 3.1 Membership The Committee shall be composed solely of Independent Voting Directors (as defined by Macquarie s policy on the independence of Directors) and have at least three members ( Committee Members ). Committee Members should be financially literate and the Chairman of the Committee should have significant and relevant accounting experience. 3.2 Chairman One of the Committee Members shall be appointed Chairman of the Committee by the Board. The Chairman of the Board shall not be eligible to be the Chairman of the Committee. If the Chairman of the Committee is not present at a meeting of the BAC CHARTER PAGE 1 OF 6

2 Committee, the members present may elect another member to act as Chairman for that meeting. The role of the Chairman of the Committee is to: determine the agenda for meetings of the Committee in conjunction with the Secretary of the Committee; chair meetings of the Committee and take reasonable steps for the proper functioning of the Committee, including the proper conduct of meetings and an appropriate level of discussion; take reasonable steps regarding the adequate flow of relevant information to the Committee; take reasonable steps to advise the Boards on the Committee s recommendations to the Boards on matters falling within the scope of the Committee s responsibilities; review the minutes of meetings of the Committee for circulation to and approval of the Committee and sign the approved minutes; and act under the delegation of the Committee. 4. MEETINGS 4.1 Frequency of meetings The Committee will hold at least four regular meetings each year and such additional meetings as the Chairman of the Committee shall deem appropriate in order to fulfil its duties. In addition, the Chairman of the Committee is required to call a meeting of the Committee if requested to do so by: any Committee Member; the Managing Director and Chief Executive Officer of Macquarie or of the Bank; the Executive Committee of Macquarie or of the Bank; the external auditors; the Chief Financial Officer; the Group Financial Controller; the Head of Internal Audit; or any other Voting Director. 4.2 Attendance by non-members All Voting Directors may attend Committee meetings. The Managing Director and Chief Executive Officer of Macquarie, the Managing Director and Chief Executive Officer of the Bank, the Chief Risk Officer, the Chief Financial Officer, the Group Financial Controller, and the Head of Internal Audit shall normally be invited to attend Committee meetings at the invitation of the Committee but will have no voting rights. The external auditor must also be invited to attend Committee meetings. BAC CHARTER PAGE 2 OF 6

3 Members of management and/or parties external to the Group may be invited to attend any meeting of the Committee or part thereof. Non-members of the Committee may be asked to withdraw from all or any part of a meeting. 4.3 Meetings other than in person Where deemed appropriate by the Chairman of the Committee, meetings may occur via conference call or other electronic means and approvals and recommendations may occur via written resolution. 4.4 Secretary The Macquarie Company Secretary (or delegate as approved by the Committee) will act as Secretary of the Committee and shall be responsible, in conjunction with the Chairman of the Committee, for drawing up the agenda (supported by explanatory documentation and papers) and circulating the Committee papers to Committee Members prior to each meeting. Voting Directors may request papers for or from any meeting and will be notified in advance of the agenda of forthcoming meetings. The Secretary will also be responsible for keeping the minutes of meetings of the Committee and circulating them to the Chairman of the Committee for review, other Committee Members, other members of the Boards, Chief Risk Officer, Chief Financial Officer, Group Financial Controller, Head of Internal Audit, external auditors, and other Committee meeting attendees as appropriate. 4.5 Conflicts The Board approved Guidelines for Board Members Declaring and Dealing with Conflicts of Interest will apply to meetings of the Committee. 4.6 Quorum A quorum shall consist of not less than half of the Committee Members eligible to vote on a matter. 4.7 Voting A motion shall be passed by a: (i) simple majority of votes cast in favour by Committee Members present and eligible to vote; or (ii) resolution in writing signed by at least three quarters of Committee Members eligible to vote and will be deemed to have been passed at the time at which the last required Committee Member signs the document. Notwithstanding Macquarie s constitution, the Chairman of the Committee will not exercise a casting vote. In the event of an equal number of votes being cast for and against a motion, the motion will be referred to the Board for resolution. 5. DUTIES AND RESPONSIBILITIES External Audit 5.1 Recommend to the Boards the appointment and removal of the external auditors. The engagement of the external auditor will be reviewed annually and tenders may be called to assist in deciding which external auditor should be recommended. 5.2 Review, consider and advise the Boards on: a) the external auditor s annual plan; b) the fees proposed by the external auditor, including whether an effective, comprehensive and complete audit can be conducted for the fee; and BAC CHARTER PAGE 3 OF 6

4 c) annual review of the qualification, expertise, resources and performance of the external auditor. 5.3 Monitor the effectiveness, objectivity, and independence of the external auditors. This may include obtaining statements from the external auditors on relationships between them and the Group. 5.4 Approve and monitor the Group s policy in relation to the provision of non-audit services by the external auditor to ensure that the provision of such services does not impair the external auditor s independence or objectivity. Financial Statements 5.5 Review with management and the external auditor at the completion of the half yearly review and the annual audit, and advise and make recommendations to the Boards as to: a) Macquarie s and the Bank s financial statements and related notes (and adoption thereof); b) the external auditor s audit or review of the financial statements and the report thereon; c) any significant changes required in the external auditor s audit plan; d) any serious difficulties or disputes with management encountered during the course of the audit or review; and e) other matters related to the conduct of the audit or review which are communicated to the Committee. 5.6 Review the significant accounting and financial reporting issues and judgements, including complex or unusual transactions made in connection with the preparation of Macquarie s and the Bank s financial statements, interim reports, preliminary announcements and related formal statements. Review the disclosures in the financial statements. Review recent regulatory and professional pronouncements and understand their impact on the financial statements, as advised by the Chief Financial Officer. 5.7 Review Macquarie and the Bank s financial statements and consider whether they are consistent with information known to Committee Members and reflect appropriate accounting principles, standards and regulations. 5.8 Review significant issues raised by subsidiary audit committees in the Group. Internal Controls 5.9 Consider and review with the external auditor: a) the adequacy of the Group s internal controls in the context of the external audit work undertaken, referring matters relating to the duties and responsibilities of the Board Risk and Board Governance and Compliance Committees to the appropriate Committee; b) the adequacy of the Group s financial regulatory reporting to APRA and banking regulators in other jurisdictions as appropriate; and c) any related significant findings and recommendations of the external auditor and management s response thereto. BAC CHARTER PAGE 4 OF 6

5 5.10 Consider and review with management and the Head of Internal Audit: a) the adequacy of the process for reporting and responding to significant control weaknesses, including the adequacy and results of management s investigation and follow up and whether there are unresolved issues, as reported by the external auditor or Internal Audit; b) the adequacy of the Group s internal controls through reviewing the scope and results of Internal Audit work undertaken, referring matters relating to the duties and responsibilities of the Board Risk and Board Governance and Compliance Committees to the appropriate Committee; c) any difficulties encountered in the course of reviews, including any restrictions on the scope of the work or access to required information; d) any instances of significant internal and external fraudulent activity identified by Internal Audit and responses thereto; e) the adequacy of the Group s APRA regulatory reporting control framework and reporting to banking regulators in other jurisdictions as appropriate; and f) the findings of any auditor observations Jointly with the Chief Risk Officer monitor and review: a) the performance of the Head of Internal Audit and the effectiveness of the Internal Audit function in forming an independent assessment as to whether risks have been properly identified, adequate controls are in place to manage these and the controls are working effectively; b) the degree of independence of the Head of Internal Audit; and c) the remuneration of the Head of Internal Audit Approve the replacement, appointment, reassignment or dismissal of the Head of Internal Audit Approve the Internal Audit plan Provide oversight in regard to the following for Internal Audit: a) Progress against annual plan and time allocation; b) changes required in the planned scope of the annual plan; and c) structure, resourcing and the use of external consultants Review and recommend for approval by the Board Risk Committee, the Internal Audit Charter at least annually Review any other reports the Group issues that relate to Committee responsibilities Meet privately with the following persons or parties at least annually in separate sessions to discuss any matters that the Committee or these parties believe should be discussed privately with the Committee: a) Head of Internal Audit; b) the external auditors. BAC CHARTER PAGE 5 OF 6

6 5.18 Meet with APRA when requested after notification to the Boards Complaint Handling Review and consider the resolution of complaints regarding accounting, internal accounting controls or auditing matters from employees and the process to protect such employees making complaints Periodic Review Review the Committee Charter annually and recommend any proposed changes to the Board for approval. Conduct a periodic, but at least biennial, evaluation of the Committee s performance and the extent to which the Committee has met its Charter Miscellaneous Institute and oversee special investigations including consultation with independent experts as needed. 6. ACCESS 6.1 The Committee shall have free and unfettered access to all personnel and other parties (internal and external), including the external auditors, as required by the Committee to carry out its duties. 6.2 Committee Members may seek independent professional advice for company related matters at Macquarie s expense, subject to the estimated costs being approved by the Chairman of the Board, in advance, as being reasonable. 7. REPORTING 7.1 The Committee, through its Chairman, is to advise and make recommendations to the Boards on matters falling within the scope of its responsibilities. Such advice may be in the form of minutes of its meetings, supporting papers, and written or oral reports at Board meetings. Date: 31 March 2016 BAC CHARTER PAGE 6 OF 6