The primary function of the Audit & Risk Committee (Committee) is to assist the IRESS Limited Board (Board) to carry out the following:
(a) monitor the adequacy of the Company’s corporate reporting processes;
(b) review and monitor the integrity of the Company’s consolidated financial reports and statements to ensure that they provide a true and fair view of, and reflect the Committee members’ understanding of, the Company’s financial position and performance;
(c) make recommendations in relation to, and oversee the appointment and (if necessary) removal of, the Company’s external auditor;
(d) liaise with the Company’s external auditor, and monitor the scope and adequacy of their external audit;
(e) review and approve the annual Audit plan;
(f) perform any other duties, and undertake or oversee any specific projects as the Board may request;
(g) review from time to time the need for an internal audit function; and
(h) review and oversee systems of risk management and internal controls.
The Committee is responsible for:
(a) reviewing half-year and full-year financial reports and statements with management and the external auditor;
(b) reviewing and making recommendations to the Board regarding significant financial, accounting and reporting issues;
(c) reviewing representation letters from the Managing Director and Chief Financial Officer to the external auditor;
(d) reviewing the appropriateness of the accounting policies adopted by management in relation to the financial reports and making recommendations to the Board as to any changes or amendments;
(e) reviewing the details of any related party transactions existing at a consolidated group level;
(f) reviewing financial statements for compliance with accounting standards and policies and other requirements relating to the preparation of financial reports; and
(g) assessing whether the half-year and full-year financial reports are consistent with the Committee members’ information and knowledge.
The Committee is responsible for:
(a) annually considering the appointment of the external auditor and, as required, considering the procedures for the selection and appointment of the external auditor and whether an audit tender process is required. Any subsequent recommendation on the appointment of the external auditor is put to the Board;
(b) reviewing and approving the terms of engagement and fees of the external auditor at the start of each audit year;
(c) reviewing the findings of the audit with the external auditor;
(d) assessing the independence of the external auditor based on the information received from the external auditor and management. In assessing independence of the external Auditor, the Committee will consider amongst other things:
(i) the employment of former employees of the external auditor;
(ii) policies on the supply of non-audit services by the external auditor;
(iii) the fees for audit and non-audit services provided by the external auditor on a regular basis;
(iv) the rotation of audit partners;
(v) the external auditor’s own statement on independence; and
(vi) any other information from the external auditor setting out all its relationships that may affect its independence.
(e) reviewing the effectiveness of the annual audit and the performance of the external auditor taking into account the opinions of management; and
(f) reviewing a proposal to engage the external auditor for a non-audit services, and assessing whether the proposed engagement would compromise the external auditor’s independence.
The Committee is responsible for:
(a) ensuring that Management has implemented a structured and comprehensive risk management system across the Company which is capable of:
(i) identifying, assessing, monitoring and managing risks that could have a material impact on the Company’s business (including operational, financial, environmental, social sustainability, compliance, strategic, ethical conduct, reputation or brand, technological, personnel, financial reporting and market-related risks); and
(ii) providing appropriate assurances to the Committee and the Board;
(b) monitoring the adequacy and effectiveness of the Company’s risk management, internal controls and compliance systems and processes including procuring that periodic reviews of extraneous risks which could affect the Company are conducted and considering the results of those reviews;
(c) monitoring material changes to the Company’s risk profile;
(d) reviewing, at least annually, the risk management framework and policies of the Company to assess whether these continue to be sound;
(e) identifying incidents involving fraud, or other breaches of the Company’s internal controls and risk management system; and
(f) reviewing the adequacy of the Company’s Insurance program, having regard to the Company’s particular business, and the insurable risks associated with that business.
(a) The Charter is reviewed annually by the Committee to keep it up to date and consistent with the Committee’s authority, objectives and responsibilities;
(b) The Committee will conduct an annual review to confirm that all activities listed in the Charter have been addressed; and
(c) All amendments to the Charter are to be approved by the Board.
The Committee reports to the Board. The external auditor reports to the Committee and the Board.
Without limiting in any way the rights of each individual Director, the Board authorises the Committee to:
(a) appoint, compensate and oversee the work of any external auditor employed by the Company;
(b) resolve any disagreements between management and the external auditor on financial reporting;
(c) pre-approve all auditing and non-audit services to be provided by the external auditor;
(d) retain independent counsel, accountants or others to advise the Committee or assist in the conduct of an investigation;
(e) seek and obtain information [from people including employees], interview management and internal and external auditors, and seek advice from external consultants or specialists, where the Committee considers any one or more of these steps to be necessary or appropriate; and
(f) delegate authority to subcommittees of the Committee.
The Audit & Risk Committee has full delegated authority from the Board to fulfil its responsibilities, including
(a) having access to adequate internal and external resources, including having:
(i) access to, and meeting with, the external and internal auditors (if any), without executives or management of the Company being present; and
(ii) unrestricted access to management, employees and information the Audit & Risk Committee considers relevant to its responsibilities under this Charter; and
(b) obtaining independent advice, at the Company's expense, including engaging and receiving advice and recommendations from appropriate independent experts.
(a) Members of the Committee (including the Committee Chair) are appointed by the Board;
(b) The Committee will consist of at least three members each of whom shall be non-executive directors. The majority of members (including the Committee Chair) must be independent non-executive directors of the Board;
(c) Directors who are not members of the Committee are encouraged to attend meetings in a non-voting capacity and are allowed full access to all Committee papers, minutes and reports at all times upon request;
(d) A Director’s membership of the Committee shall cease automatically where such Director ceases to be a Director of the Company;
(e) Each Committee member must have a working familiarity with general finance and accounting practices. At least one member of the Committee must have accounting or related financial management expertise; and
(f) The performance of the Committee will be evaluated by the Board at least annually.
(a) The Committee will meet at least four times per year and the schedule of meetings will be agreed in advance;
(b) Additional meetings may be convened as required or as requested by the Committee Chairman or the Board;
(c) The Committee Chair will call a meeting of the Committee if so requested by any member of the Committee, the external auditor, internal auditor (if any) or by the Chairman of the Board;
(d) A quorum shall be any two (2) members;
(e) Should the Committee Chair be absent from the meeting, the members of the Committee present at the meeting have the authority to choose one of their number to chair that particular meeting;
(f) The primary functions, responsibilities and composition of the Committee, along with the attendance by members of the Committee meetings, will be disclosed in the Annual Report;
(g) The secretary of the Committee will be the Company Secretary or in the absence of the Company Secretary a suitable alternative approved by the Committee Chair;
(h) The agenda and supporting papers will be delivered to Committee members in advance of the meeting. At the discretion of the Chair of the Committee meeting, additional papers may be tabled for discussion at the meeting;
(i) Proceedings of all meetings are to be minuted by the secretary to the Committee meeting, and:
(i) circulated to members within two weeks of a meeting;
(ii) be approved by the Committee and signed by the Committee Chair at the next meeting; and
(iii) tabled at the first Board meeting after the Committee meeting either in draft form or signed if there has been an intervening meeting of the Committee.
It is expected that the Managing Director, the Chief Financial Officer and the external auditor will usually attend any meeting of the Committee. However, the Committee may also invite any person to attend any meeting or part of any meeting of the Committee.
Any matters requiring decision will be decided by a majority of votes of members present in person or by phone.
(a) For the purpose of supporting the independence of its function, the external auditor has a direct line of reporting access to the Committee; and
(b) Under the terms of the Company’s Code of Ethics Policy, IRESS staff have access to the Committee Chair if required.