Audit Committee Charter Bank of Queensland Limited Issue Date: 9 August 2018
AUDIT COMMITTEE CHARTER 1 Purpose The Bank of Queensland Limited (BOQ) Audit Committee (Committee) has been established by the BOQ Board (the Board) to assist the Board and the relevant BOQ subsidiary Boards (BOQ Group Boards) to effectively discharge their responsibilities by having of oversight of the integrity of the financial statements and financial reporting systems of BOQ and its subsidiaries (BOQ Group). For the avoidance of doubt, the Committee discharges the above responsibilities in relation to the Company and, as applicable, the entities it controls. However, BOQ s subsidiary companies, St Andrew s Australia Services Pty Ltd, St Andrew s Insurance (Australia) Pty Ltd and St Andrew s Life Insurance Pty Ltd (collectively, the St Andrew s Group) have a dedicated Audit Committee. The Charter of the St Andrew s Group Audit Committee provides that oversight by the Committee will be satisfied by way of the receipt of regular reports and updates from the Chair of the St Andrew s Group Audit Committee. 1.1 Role of the Committee The Committee provides assistance and makes considered recommendations to the Board in fulfilling its statutory and fiduciary responsibilities with respect to oversight of the financial reporting and financial control environment of the BOQ Group and reporting on its effectiveness. This Committee s role encompasses: (a) oversight of the integrity of the financial statements and financial reporting systems; (b) oversight of the BOQ Group s financial reporting, including oversight of the Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission statutory reporting and disclosure requirements; (c) oversight of Australian Accounting Standards requirements; (d) oversight of the BOQ Group compliance with, and reporting of, its taxation obligations and for the review and recommendation to the Board of appropriate tax risk management policy; (e) oversight of the performance and effectiveness of BOQ Group s Group Assurance function; (f) reviewing the appointment, compensation, performance, effectiveness and independence of the External Auditor; (g) providing a formal forum for communication between the Board and senior financial management; (h) improving the efficiency of the Board by delegating tasks to the Committee, where such tasks should be discussed in sufficient depth; and (i) being available to meet with APRA, on request. 2 The Committee 2.1 Composition (a) The Committee must comprise of a minimum of three independent non-executive members of the Board of Directors. (b) The Managing Director & CEO (MD & CEO), Chief Financial Officer (CFO), Chief Risk Officer, Treasurer, Head of Group Assurance, the External Auditor, and representatives of Management may be invited to attend part or all of any meeting of the Committee, as required. (c) Membership of the Committee will be considered by the Board on an annual basis. (d) BOQ s Company Secretary or his/her designated representative will be appointed as the Committee Secretary. (e) Members will be given the opportunity to attend technical or professional development courses to assist them in keeping up to date with legislative, accounting or other relevant issues.
2.2 Chair of the Committee AUDIT COMMITTEE CHARTER The Chair of the Committee will be an independent non-executive Director of BOQ and be appointed by the Board. The Chair of the Board of Directors or the Risk Committee should not be the Chair of the Audit Committee. The Committee Chair will chair Committee meetings. In the absence of the Committee Chair (or his or her properly appointed delegate), the members will elect one of their number as Chair of that meeting. 3 Meetings 3.1 Quorum A quorum will consist of two independent, non-executive members. 3.2 Agenda (a) The agenda for Committee meetings will be prepared by the Company Secretary and approved by the Committee Chair. (b) The agenda will include those items required by the Committee Charter and such other items as are requested by Committee members or Management and approved by the Committee Chair. (c) The agenda and supporting papers are to be delivered to Committee members by the Company Secretary at least seven (7) days in advance of each meeting. Late papers may be accepted only with the consent of the Committee Chair. 3.3 Scheduling and Notice (a) The Committee will meet as often as required to undertake its role effectively, but no less than four meetings per year. The Chair of the Committee or the Chair of the Board may call a meeting of the Committee at any time, or if so requested by any member of the Committee. (b) The Company Secretary will provide adequate notice to all members of the Committee of all meetings. 3.4 Voting (a) Meetings are governed by the provisions of the Company s constitution regulating directors meetings. (b) Wherever possible, the Committee should seek determine matters before the Committee by consensus. If the Committee is unable to reach a consensus on a matter, this will be recorded in the Committee minutes and the Committee Chair will advise the Board of the range of views held by members of the Committee on the issue. (c) Any person with a material personal interest in a matter being considered by the Committee must not be present when that matter is considered by the Committee. (d) For the avoidance of doubt, decisions of the Committee may be made at a duly called and constituted meeting or otherwise agreed by Committee members in accordance with those provisions of the Company constitution governing written resolutions. 3.5 Additional Attendees (a) Members of the Board who are not Committee members are entitled to attend Committee meetings but cannot vote on any matters being considered by the Committee. For the avoidance of doubt, all Committee papers are available to all members of the Board subject to the Company s rules in relation to conflicts of interests, as amended from time to time. (b) The Committee may, if it deems appropriate, invite to the Committee meeting, or hold private meetings with such advisers or Management personnel as the Committee may require.
3.6 Minutes AUDIT COMMITTEE CHARTER (a) Minutes are to be prepared for each Committee meeting. (b) The draft minutes of each meeting are to be reviewed by the Committee Chair and circulated to all Committee members by the Company Secretary as soon as practicable but no later than the distribution date for the papers for the next Committee meeting. (c) The Committee must confirm the minutes of each Committee meeting at its next meeting. (d) A copy of the minutes, once they have been approved by the Committee, must be signed by the Committee Chair and made available to the Company s Board. 3.7 Expert Advice The Committee has the right to seek independent professional advice in connection with carrying out its duties at the Company s expense. Prior written approval from the Chair of the Board is required prior to seeking such professional advice. 4 Reporting The Committee will report to the Board about Committee activities and make recommendations to the Board on matters relevant to the Committee s purpose. The Committee will prepare any reports required by law, the ASX Listing Rules or otherwise requested by the Board. 5 Responsibilities Without limiting its role, to fulfil its duties and responsibilities the Committee will: 5.1 Financial Reporting Processes (a) Review and discuss with Management and the External Auditor the half year reviewed and annual audited financial statements, and other financial information for public release (including but not limited to APRA Pillar 3 Disclosures), including recommendations to the Board for the adoption and/or release of these reports. (b) Discuss with Management and the External Auditor any significant financial reporting issues and judgements made in connection with the preparation of the BOQ Group s financial statements, including significant changes in the BOQ Group s selection or application of accounting principles. (c) Review, with the External Auditor, the External Auditor s report regarding significant findings in the conduct of their audit and the adequacy of Management s response. (d) Discuss with Management, the Head of Group Assurance and the External Auditor major issues as to the adequacy and effectiveness of the BOQ Group s internal controls over financial information, reporting and disclosure, as well as any special steps adopted in light of material control deficiencies. (e) Discuss with Management and the External Auditor judgements on the quality and appropriateness of the BOQ Group s application of accounting principles and policies, as applied in its financial reporting, including the use of alternative disclosures and accounting principles treatment. (f) Discuss with Management and the External Auditor the process surrounding, and the disclosures made by, the MD & CEO and the CFO in connection with their personal certification of the half year and annual financial statements. (g) Discuss with the External Auditor the BOQ Group s major financial risk exposures and the steps that Management has taken to monitor and control such exposures, including the BOQ Group s risk assessments and risk management policies. 5.2 External Audit function (a) Recommend to the Board the selection and removal of the external auditor, subject to shareholder ratification, considering independence, qualifications, performance and the effectiveness of the external auditor (including a review of the qualifications, background and experience of the external auditor).
AUDIT COMMITTEE CHARTER (b) Annually review the External Auditor's performance and independence and periodically benchmark the cost and scope of the external audit engagement. (c) In consultation with management, review and note the External Audit Plan and approve the terms of the annual engagement letter and audit fees. (d) Review and discuss the scope of the external audit, particularly the identified risk areas and whether, in conjunction with Group Assurance s internal audit program, all material risks and financial reporting requirements are covered, together with any additional agreed-upon procedures, on a regular and timely basis. (e) Review and discuss the provision of non-audit services by BOQ s External Auditor, in terms of type and quantity of services provided, including ensuring compliance with the Auditor Independence Policy. Where the external auditor provides non-audit services, the Committee should satisfy itself that the provision of those services has not compromised the auditor s independence. (f) Pre-approve categories of non-audit services that may be provided by the External Auditor. (g) Discuss and evaluate with the External Auditor any relationship that may impact their objectivity and independence. (h) Consider and oversee resolution of any disagreements between the External Auditor and Management regarding the BOQ Group s financial reporting. (i) Review and discuss with the external auditor all significant relationships the external auditor has with the BOQ Group and obtain a declaration from the external auditor to provide reasonable assurance that the external auditor s independence is maintained. (j) Periodically meet with the External Auditor without Management being present. 5.3 External Audit Rotation The External Auditor is required to rotate the lead audit partner and the audit review partner, so that neither role is performed by the same partner for more than five years, or more than five years out of seven successive years, in accordance with the BOQ Auditor Independence Policy. 5.4 Group Assurance function (a) Recommend to the Board the appointment and replacement of the Head of Group Assurance. (b) Periodically meet with the Head of Group Assurance without Management being present. (c) Review and recommend to the Board the Group Assurance Charter, annual Group Assurance Plan, and the adequacy of the budgeting and staffing of the Group Assurance function. (d) Review and discuss the regular Group Assurance reports, including Group Assurance s independent opinion and recommendations, Management responses, timing and implementation of action plans. (e) Annually review and discuss the structure, performance, adequacy and organisational independence of the Group Assurance function. (f) Monitor all audit issues rated as high and any and unsatisfactory audit outcomes. 5.5 Other Responsibilities (a) Discuss with Management and the external auditor any correspondence with regulators or government agencies which raise material issues or could affect matters regarding the BOQ Group s financial statements or accounting policies. (b) Review and discuss, and where appropriate, respond to any complaints that it has received regarding the BOQ Group s accounting and auditing practices and processes. (c) Discuss with BOQ s General Counsel any legal matters that may have a material impact on BOQ Group financial statements.
AUDIT COMMITTEE CHARTER (d) Regularly discuss and receive reports from the Chair of the BOQ Risk Committee and the Chair of the St Andrew s Group Audit Committee and the St Andrew s Group Risk Committee on relevant risk matters that should come to the attention of the BOQ Audit Committee. (e) The BOQ Auditor Independence Policy will be reviewed by the Committee for recommendation to the Board for approval of any amendments. The BOQ Audit Committee will refer to the BOQ Risk Committee, the St Andrew s Group Audit Committee or the St Andrew s Group Risk Committee any matters that have come to the attention of the BOQ Audit Committee that are relevant for the BOQ Risk Committee, St Andrew s Group Audit Committee or St Andrew s Group Risk Committee for noting or consideration, or which should be dealt with by that Committee. 6 Access The Committee has unrestricted access to executives of any other office or employee of the BOQ Group, as well as the External Auditor, in order to fulfil its role and undertake its duties. The Committee will provide the Head of Group Assurance, the External Auditor and other relevant executives with clear right of access to the Committee Chair. The External Auditor will have unfettered access to Management, staff, records and company facilities, and is permitted reasonable, agreed time to conduct its audit. Members of the Committee will be available to meet with APRA on request. 7 Annual Review 7.1 Committee Performance The Committee will undertake an annual review of its performance against the requirements of this Charter and provide that information to the Board along with any recommendations resulting from the review. 7.2 Committee Charter Review This Charter supersedes any charter or terms or reference previously in force. Any modifications to or replacements of this Charter must be approved by the Board. The Committee will review this Charter at least once per annum. The next scheduled review is July 2019. 8 Definitions and Interpretation ASX means ASX Limited ACN 008 624 691 and the exchange operated by it. Board means the board of directors of Bank of Queensland Limited. Company means the Bank of Queensland Limited, ABN 32 009 656 740. Corporations Act means the Corporations Act 2001 (Cth) as amended from time to time. Director means a director of the Company or its subsidiaries. Listing Rules means the listing rules of the ASX. Technology means information technology and includes, without limitation, digital and innovation technologies.