Audit Committee Terms of Reference - Co-op Connection

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2 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.
3 4. Meetings 4.1 The Committee shall meet a minimum of four times a year, preferably quarterly. 4.2 An extraordinary meeting of the Committee may be called by the Chair of the Committee, the President/Chair of the Board or the Chief Executive Officer of the Cooperative. 4.3 A quorum for meetings shall be three Committee Directors present in person or by telephone or other telecommunications device that permits all persons participating in the meeting to speak and hear one another. 4.4 The agenda and associated material shall be sent to each member of the Committee prior, preferably seven days, to the time for such meeting. 4.5 The Committee shall have the right to determine who shall and shall not be present at any part of the meetings of the Committee, and may hold in-camera sessions. 5. Support to the Committee 5.1 The Committee shall identify, through the Senior Leadership Team staff support appointed to the Committee, or designate, the kind and frequency of information required by the Committee. 5.2 The Committee shall have access to any and all books and records of the Corporation required for the execution of the Committee’s risk management obligations and, as necessary, shall discuss with appropriate corporate officers and employees, coordinated through the Senior Leadership Team staff support, such records and other relevant matters. 5.3 The Committee shall have the authority to request of the Board the retention of external advisors, experts or consultants, in order to properly discharge its duties and responsibilities. 6. Confidentiality 6.1 All deliberations of the Committee, and all records, material and information pertaining to the Co-operative obtained by a member of the Committee shall be considered confidential. Committee members shall maintain the confidentiality of such deliberations, and shall safeguard such records, material and information from improper access.
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Audit Committee Terms of Reference - Co-op Connection

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