MANDATE – AUDIT COMMITTEE

Jberger

Sujets

• management
• risk management

Informations

• Publié par: Chowyug
• Nombre de lectures: 28
• Langue: English

Extrait

MANDATE – AUDIT COMMITTEE

Mission

The Treasury Board Secretariat (TBS)

Policy on Internal Audit, effective July 1, 2009

, Directive

on Departmental Audit Committees, provides direction on the role and responsibilities of Audit

Committees. The Policies on

Internal Control, effective April 2009,

and F

inancial Management

Governance, effective April 2009,

provide further direction on the responsibility of the Committee.

This Audit Committee Mandate incorporates such guidance. (

Policy on Internal Audit; Directive on

Departmental Audit Committees; Policy on Internal Control

;

Policy on Financial Management Governance)

The Policy on Internal Audit - Directive on Departmental Audit Committees states that:

“The departmental Audit Committee is an essential part of governance and of the

audit regime established by the Policy on Internal Audit. The policy makes the

deputy head (Superintendent) of each department (OSFI) responsible for establishing

an independent departmental audit committee that includes experienced, competent

external members.”

The Policy on Internal Control states that the deputy head (Superintendent) is responsible

for:

“Engaging with the Departmental Audit Committee, as applicable, on risk-based

assessment plans and associated results related to the effectiveness of the

departmental system of internal control over financial reporting.”

The Policy on Financial Management Governance states that:

“The Committee acts as an independent and objective advisor to the deputy head

(Superintendent) and provides guidance to the deputy head on the adequacy of the

department’s (OSFI) systems of internal control, financial reporting and financial

disclosures.”

Role and Scope of Work of the Audit Committee

The Audit Committee is advisory to the Superintendent. The mandate of the Audit Committee

(Committee) is to provide objective advice and recommendations to the Superintendent regarding

the sufficiency, quality, and results of assurance on the adequacy and functioning of OSFI’s risk

management, control and governance frameworks and processes, including accountability and

auditing systems. In order to give this support to the Superintendent, the Committee will exercise

oversight of core areas of OSFI’s management, control, and accountability, including reporting, in

an integrated, risk-focused, and systematic way.

The Audit Committee, as a strategic resource to the Superintendent, also provides such advice and

recommendations as may be requested by the Superintendent on specific emerging priorities,

concerns, risks, opportunities, and/or accountability reporting.

Office of the Superintendent of Financial Institutions Canada

IA

Internal Audit

IA

April 2011

Page 2 of 7

Responsibilities and Specific Duties of the Committee

Priorities for the Committee will be set by the Superintendent in consultation with the Committee.

Internal audit function

In connection with OSFI’s internal auditing function (Internal Audit), the Committee shall

exercise an oversight role with respect to IA. Oversight activities include:



Ensuring the independence of the internal audit function;



Annually reviewing and recommending for approval the Internal Audit Mandate;



Providing advice to the Superintendent on the recruitment, appointment, and performance

of the Managing Director, IA (the Chief Audit Executive, “CAE”);



Meeting with the CAE, as the Committee may consider appropriate, to discuss any

concerns or issues;



Reviewing the IA annual risk assessment, and internal audit plan and budgets with the

CAE and senior management to ensure IA has adequate resources to effectively carry out

its mandate pursuant to the IA mandate;



Review the annual IA budget;



Reviewing and recommending for approval, the annual IA

risk assessment, and multi-year

risk-based internal audit plan. Being made aware of audit engagements or tasks that do not

result in a report, and being informed of all matters of significance arising from such work;



Regularly reviewing, including regular status reports, the performance of IA by making

inquiries to satisfy itself that IA audit objectives and goals, staffing plans, financial

budgets, and audit timetables provide for adequate support of the Committee’s own goals

and objectives;



Reviewing the annual performance report of IA;



Reviewing and recommending for approval, internal audit reports, and corresponding

management action plans to address recommendations;



Following-up on management action plans regarding internal audit recommendations:



Advice on the effectiveness of arrangements in place to monitor and follow-up on

management action plans responding to recommendations from IA internal audits, the

Office of the Auditor General (OAG), other auditors, or central agencies.;



Periodically receiving reports from management on actions taken to address IA

recommendations; and



The CAE periodically reporting to the Committee on whether management's action

plans have been implemented and, based on risk-targeted follow up work, whether

there is reason to question the effectiveness of the actions taken. The report should

identify areas where IA believes management has accepted a level of risk that is

unacceptable to OSFI or to Federal government.



Assessing the implications of audit related issues, and IA priorities and initiatives raised by

the Treasury Board and other government organizations; and



Receiving and recommending for approval an annual assurance overview report prepared

by the CAE.

Office of the Superintendent of Financial Institutions Canada

IA

Internal Audit

IA

Office of the Auditor General (OAG) and Central Agencies

The Audit Committee responsibilities include:



Providing advice to the Superintendent on the adequacy of arrangements to support the audit work of the

OAG, other agents of Parliament, and central agencies;



Being briefed on all audit work (performance or annual financial statements audit) relating to OSFI

undertaken by OAG;



Being briefed on all audit work undertaken by other agents of Parliament or central agencies;



Reviewing and recommending acceptance of the annual financial statement audit plan, as well as the

annual external audit report;



Reviewing with the external auditor any difficulties or disputes with management encountered in the

course of the audit;



Reviewing Management Letters arising from the financial statement audit and the auditor’s findings and

recommendations relating to the internal controls in place for financial statement reporting;



Reviewing draft audit reports of the OAG, other agents of Parliament and central agencies, as may be

referred by the Superintendent and, as may be requested by the Superintendent,

recommend for

approval corresponding management responses and action plans;



Periodically reviewing reports from management on actions taken on performance or annual financial

audit;



Periodically meeting with representatives from the OAG and seeking its comments and advice on

matters of OSFI risk, control and governance;



Being briefed on audit-related issues and priorities raised by central agencies and, as may be requested

by the Superintendent, make recommendations on required action;



Being briefed, and advising the Superintendent on, the impact of government-wide; and initiatives to

improve management practices,



Reviewing the performance of the external auditor.

Integrity of Financial Statements

Annual Financial Statements – The Committee shall review and discuss with management and the external

auditor, OSFI’s audited annual financial statements and all significant accounting estimates and judgments

therein and, if appropriate, recommend to the Superintendent to approve the audited annual financial statements.

Quarterly Financial Statements – The Committee shall review and discuss with management and, if appropriate,

provide advice and comment on the quarterly unaudited financial statements.

Other Responsibilities

Other areas of responsibility within polices set out under Mission include:



Values and Ethics - The Committee shall review, at least annually, the arrangements established by

management to exemplify and promote OSFI’s values and compliance with laws, regulations, policies,

and standards of ethical conduct.



Risk Management - The Committee shall review OSFI’s corporate risk profile and risk management

arrangements and provide any related advice to the Superintendent.



Management Control Framework - The Committee shall review, at least annually, OSFI’s internal

control arrangements related to:

April 2011

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Office of the Superintendent of Financial Institutions Canada

IA

Internal Audit

IA

o

System of internal control

1

;

o

Financial reporting and financial disclosures; and

o

Risk-based assessment plans and associated results including internal audit and, as appropriate,

management-led audit reports.



Receive the Report on Plans and Priorities, Departmental Performance Report, and other significant

accountability reports (e.g. Annual Report) - The Committee shall review these reports as providing

context for the Committee’s deliberations and advice to the Superintendent and to provide advice, over

time, on any material misstatements or omissions that may come to their attention.

In addition to the above, the Committee shall prepare an Annual Report to the Superintendent that:



Summarizes the Committee's activities undertaken and the results of those activities;



Provides the committee’s assessment of OSFI’s system of internal control;



Documents any significant concerns the committee may have in relation to OSFI’s risk management,

control and governance framework and processes;



Provides, as needed, recommendations for the improvement of risk management, controls and

accountability processes / arrangements, including recommendations for the improvement of the internal

auditing function;



Provides the Committee's assessment of the capacity and performance of the IA.

A copy of this report is to be provided to the Comptroller General.

Constitution and Functioning of the Committee

Number of Members:

The Committee will consist of three to five independent external directors. The Superintendent is an ex-officio

member of the Committee.

Review of Mandate

The Superintendent and the Audit Committee shall review and assess the adequacy of this Mandate annually

and at such other times as they consider appropriate and shall make such changes as are considered necessary or

appropriate.

Committee Annual Work Plan

The Chair of the Committee is to prepare a plan to ensure that the annual and ongoing responsibilities are

scheduled and fully addressed. The plan shall be presented to the Committee for its endorsement and

recommendation to the Superintendent for approval.

1

Policy on Internal Control - Definition: System of internal control - Is a set of internal controls in a department to mitigate risks and

provide reasonable assurance in the following broad categories:

The effectiveness and efficiency of programs, operations, and

resource management, including safeguarding of assets; The reliability of financial reporting; and Compliance with legislation,

regulations, policies and delegated authorities.

As such, internal controls operate at all levels throughout the organization and are an integral part of an organization's risk

management framework. In practice, the departmental system of internal control is composed of several internal control systems

covering various management areas, such as financial management and financial reporting.

April 2011

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Office of the Superintendent of Financial Institutions Canada

IA

Internal Audit

IA

Annual Performance Evaluation

Each year, the Committee shall assess its performance and effectiveness in accordance with a process

established by the Committee for such purpose.

Retaining and Compensating Advisors

The Committee shall have the authority to engage independent counsel and any other external advisors as the

Committee may deem appropriate in its sole discretion and to set and pay the compensation for any advisors

employed by the Committee.

Appointment and Removal of Members of the Committee:



Superintendent appoints members in consultation with the Comptroller General of Canada for approval

by the Treasury Board.



The terms of the independent members of Audit Committee shall not exceed four years. No member

shall be appointed for more than two terms.



Vacancies shall be filled as soon as possible.



With the consent of the Comptroller General, the Superintendent may, by giving thirty days written

notice, remove an Audit Committee member. The reasons for removal of, or voluntary departure of, an

Audit Committee member must be communicated to the Comptroller General of Canada.

Committee Knowledge and Experience Requirements

The Committee, as a whole, shall meet the knowledge and experience requirements as set out in Appendix A, as

amended from time to time and the specific requirements of the TBS Policy on Internal Audit.

Audit Committee members shall receive formal orientation and training on the Committee’s responsibilities and

objectives, and on the business of OSFI.

Committee Financial Literacy

All Members of the Committee shall be familiar with private or public sector financial reporting, or undertake

to become familiar within the first year after appointment.

At least one Member shall be a financial expert who possesses:



An understanding of generally accepted accounting principles and financial statements;



Ability to assess the general application of such principles in connection with the accounting for

estimates, accruals, and reserves;



Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and

level of complexity of accounting issues that are generally comparable to the breadth and complexity of

issues that can reasonably be expected to be raised by OSFI's financial statements, or experience actively

supervising one or more persons engaged in such activities;



An understanding of internal controls and procedures for financial reporting; and



An understanding of audit committee functions.

Committee Chair

An independent member shall be the Chair of the Committee.

April 2011

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Office of the Superintendent of Financial Institutions Canada

IA

Internal Audit

IA

Committee Meetings



Quorum – A quorum of the Committee shall be a majority of its Members and no business shall be

transacted by the Committee except at the meeting at which a quorum of the Committee is present.



Secretary – The Chair may designate, from time-to-time, a person who may, but need not, be a Member

of the Committee, to be Secretary of the Committee. The Secretary shall prepare written Minutes of all

Committee meetings.



Time and Place of Meetings – The Committee shall meet at least four times a year. The Committee shall

schedule their meetings one year in advance so that OSFI’s senior management and IA can prepare the

information and reports required to support the Committee's work.



Attendees - The Chief Audit Executive will attend all Committee meetings. The Auditor General of

Canada (OAG), being the external auditor, will receive notice of every meeting of the Committee.

In Camera

Sessions

- As part of each meeting of the Committee, the independent members of the Committee

shall meet individually in camera with of the following:



Superintendent;



Managing Director, IA (Chief Audit Executive);



Managing Director, Finance and Corporate Planning (Senior Financial Officer);



Representative of the Office of the Auditor General, if attending; and



Any other officials the Committee may determine to assist in the discussion.

Access

As required, officers of the Treasury Board Secretariat and the Office of the Auditor General are to be provided

with access to the Committee to address matters of mutual interest or concern.

April 2011

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Office of the Superintendent of Financial Institutions Canada

IA

Internal Audit

IA

April 2011

Page 7 of 7

Appendix A – Qualifications of the Audit Committee

Among the members of the Audit Committee there needs to be high-level knowledge / experience in the

following areas:



Financial knowledge / experience



GAAP



Financial Statements



Internal financial reporting



Senior financial industry operating knowledge / experience



Deposit taking



Life insurance



Property & Casualty insurance



Pensions



Investment banking



Risk-based audit / investigative knowledge / experience



GAAS / IIA standards



TBS Internal Audit and Evaluation policy



Supervisory Framework



Risk-based audit plans / reporting



Regulatory knowledge / experience



Rules frameworks



Regulatory approaches / tools



General business knowledge



Risk / Risk Management



Performance measurement



Controls



Governance (including corporate planning and reporting)



Strategy development



Communication (media, government, international regulators)



Basic contract law / business operations

General Competencies of Audit Committee Members:



Independence / objectivity (for at least some members)



Communication skills



Not afraid to ask the ‘tough’ questions



Able to see the ‘forest’ (not just focussed on the ‘trees’)