Duties and Proceedings of the Committee
The Committee shall assist the Board of Directors in fulfilling its oversight responsibilities by accomplishing the following:
5.1 Oversight of the Independent Auditor
Annually evaluate, determine the selection of, and if necessary, determine the replacement of or rotation of, the independent auditor.
Approve or pre-approve all auditing services (including comfort letters and statutory audits) and all permitted non-audit services by the auditor.
Review, evaluate and discuss formal reports, at least annually, from the independent auditor regarding the auditor's independence, including a delineation of all relationships between the auditor and the Company, consistent with the applicable requirements of the Public Company Accounting Oversight Board; and recommend to the Board of Directors actions to satisfy the Board of the independence of the auditor.
Establish hiring policies for employees or former employees of the independent auditors.
At least annually, receive a report, orally or in writing, from the independent auditor detailing the firm's internal quality control procedures and any material issues raised by the independent auditor's internal quality control review, peer review or any governmental or other professional inquiry performed within the past five years and any remedial actions implemented by the firm.
5.2 Oversight of Audit Process and Company's Legal Compliance Program
Review with the independent auditor the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation. Review with the independent auditor any difficulties with audits and managements' response.
Review and discuss with management and the independent auditor the Company's system of internal control, its financial and critical accounting practices and policies relating to risk assessment and management.
Receive and review reports of the independent auditor discussing: (i) all critical accounting policies and practices used in the preparation of the Company's financial statements; (ii) all alternative treatments of financial information within generally accepted accounting principles ("GAAP") that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and (iii) other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.
Discuss with management and the independent auditor any changes in Company's critical accounting principles and the effects of alternative GAAP methods, off-balance sheet structures and regulatory and accounting initiatives.
Review and discuss with management and the independent auditor the annual and quarterly financial statements, including the disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" (“MD&A”), of the Company prior to the filing of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Discuss results of the annual audit and quarterly review and any other matters required to be communicated to the committee by the independent auditor under generally accepted auditing standards. Discuss with management and the independent auditor their judgment about the quality of accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements, including the Company's disclosures of critical accounting policies and other disclosures under MD&A.
Review, or establish standards for the type of information and the type of presentation of such information to be included in earnings press releases and earnings guidance provided to analysts and rating agencies.
Review material pending legal proceedings involving the Company and other contingent liabilities.
Receive from the CEO and CFO a report of all significant deficiencies and material weaknesses in the design or operation of internal controls, and any fraud that involves management or other employees who have a significant role in the Company's internal controls.
Discuss with the independent auditor the matters required to be communicated to the audit committee in accordance with the applicable requirements of the Public Company Accounting Oversight Board and the SEC.
Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or accounting matters.
5.3
Other Responsibilities
Review the overall effectiveness of the Company's ethics and compliance programs, including the Code of Business Conduct and Ethics.
Review the adequacy of this audit committee charter annually and submit the charter to the Board of Directors for approval.
Prepare the report for inclusion in the Company's annual proxy statement as required by the rules of the SEC.
Review significant and unusual transactions of the Company.
Review and approve all "related party transactions" in accordance with Company policy.
Review financial relationships and transactions with executive officers of the Company, including executive compensation arrangements, in accordance with Company policy.
Establish an appropriate control process for reviewing and approving Company's internal transactions and accounting.
Report to the Board on a regular basis.
Annually perform, or participate in, an evaluation of the performance of the Committee, the results of which shall be presented to the Board.
Review the cyber‐security risk management program, including reporting back to the Board of Directors annually about the Company's cyber‐security risk assessment and strategy to address potential weaknesses.
Perform any other activities consistent with the Company's Amended Articles of Association and applicable law as the Board of Directors or the Audit Committee deem appropriate, including holding meetings with the Company's investment bankers and financial analysts.