Audit Committee Terms of Reference - Co-op Connection

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3. Responsibilities
The Committee shall have the following duties and responsibilities respecting the audit
function:
3.1 Oversee the hiring and performance of the external auditor.
3.2 Recommends annually to the Board and the annual general meeting on the appointment
of the external auditor.
3.3 Consults with FCL’s external auditor, reviews and endorses the extent and scope of the
auditing services provided, reviews the independence of the external auditor and
recommends to the Board approval of the auditor’s fee for such services.
3.4 Receives from the external auditor any queries, and investigates these and related
matters as deemed necessary by the Committee.
3.5 Oversees the Internal Audit function.
3.6 Review with management, the external auditor and internal audit the internal audit
charter, plans, activities, staffing and organizational structure of the internal audit
function.
3.7 Ensure there are no unjustified restrictions or limitations on the functioning of the
internal audit department.
3.8 Reviews the annual consolidated financial statements and recommends their approval
to the Board. This review includes consideration of:
3.9 Complex accounting estimates and judgements made by management.
3.10 New accounting principles or regulations.
3.11 The external auditor’s views on management’s selection of accounting principles,
accounting adjustments arising from their audits, disagreements or difficulties
encountered in working with management.
3.12 Consider the effectiveness of FCL’s internal control system. This includes:
3.13 Ensuring that management has developed and followed an adequate system of internal
control including controls over the safeguarding of assets and compliance with laws
and regulations.
3.14 Discussing with management, external and internal auditors the risk of fraud and how
the risk is mitigated.
3.15 Reviews with management FCL’s major policies with respect to risk assessment and
risk management.
3.16 Review its Terms of Reference on an annual basis and recommend any changes to the
Board.