| (a) |
to be primarily responsible for making recommendation to the board on the appointment, reappointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and handle any questions of resignation or dismissal of that auditor;
|
| (b) |
to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standards, and to discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences;
|
| (c) |
to develop and implement policy on the engagement of an external auditor to supply non-audit services; and to report to the board, identifying any matters in respect of which it considers that action or improvement is needed and making recommendations as to the steps to be taken;
|
| (d) |
to monitor the integrity of financial statements and the annual report and accounts, the half-year report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgments contained in them. In reviewing such reports and accounts before submission to the board, the committee should focus particularly on: -
(i) any changes in accounting policies and practices;
(ii) major judgmental areas;
(iii) significant adjustments resulting from the external and internal audits;
(iv) the going concern assumptions and any qualifications;
(v) compliance with accounting
standards; and
(vi) compliance with the Listing Rules and other legal requirements in relation to financial reporting;
|
| (e) |
In regard to (d) above:-
| (i) |
members of the committee must liaise with the board of directors and senior management, and the committee must meet, at least once a year, with the auditors; and |
| (ii) |
the committee should consider any significant or unusual items that are, or may need to be, reflected in such reports and accounts and must give due consideration to any matters that have been raised by the Company's staff responsible for the accounting and financial reporting function, compliance officer or auditors;
|
|
| (f) |
to review the financial controls, internal control and risk management systems;
|
| (g) |
to discuss with the management the system of internal control and ensure that management has discharged its duty to have an effective internal control system including the adequacy of resources, qualifications and experience of staff of the Company's accounting and financial reporting function, and their training programmes and budget;
|
| (h) |
to consider any findings of major investigations of internal control matters as delegated by the board or on its own initiative and management's response;
|
| (i) |
where an internal audit function exists, to ensure co-ordination between the internal and external auditors, and to ensure that the internal audit function is adequately resourced and has appropriate standing within the Company, and to review and monitor the effectiveness of the internal audit function;
|
| (j) |
to review the Group's financial and accounting policies and practices;
|
| (k) |
to review the external auditor's management letter, any material queries raised by the auditor to management in respect of the accounting records, financial accounts or systems of control and management's response;
|
| (l) |
to ensure that the board will provide a timely response to the issues raised in the external auditor's management letter;
|
| (m) |
to report to the board on the matters set out in the Code on Corporate Governance Practices contained in Appendix 14 to the Listing Rules; and
|
| (n) |
to consider other topics, as defined by the board.
|
