Novanet Audit Committee Terms of Reference

NOVANET AUDIT COMMITTEE

TERMS OF REFERENCE

Purpose

The primary purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities by overseeing the internal control environment and reviewing the financial statements. The Audit Committee contributes to the overall governance of Novanet by promoting a culture of transparency, honesty and ethical behaviour. The Committee is advisory to the Board unless, and to the extent that, the Board grants it decision-making authority for specific matters. The Audit Committee shall have direct communication channels with the external auditor to discuss and review issues within its mandate. The Audit Committee makes its recommendations directly to the Board.

Authority

The Novanet Audit Committee is created by and receives its authority from the Novanet Board of Directors.

Responsibilities

  • Recommend to the Board the appointment and compensation of the external auditor.
  • Ensure the independence of the external auditor, including prior approval by the Audit Committee of any proposal of Novanet to hire personnel of the external auditor within one year of that person’s involvement with the audit.
  • Review and approve the scope of the annual audit.
  • Pre-approve all non-audit services and other audit services to be provided to Novanet by the external auditor.
  • Review all audit planning and year-end documents as well as any other reports submitted by the external auditor.
  • Review the overall effectiveness of the managerial process for identifying risks affecting financial reporting.
  • Meet with management and the external auditor to determine the effectiveness of internal controls.
  • Oversee compliance with material legislative responsibilities.
  • Resolve any disagreements between management and the external auditor.
  • Review and, if appropriate, recommend the annual audited financial statements for approval by the Board.

Membership

The Novanet Audit Committee shall consist of three members:

  • The Chair of Novanet Board of Directors (ex officio)
  • Two Audit Committee members will be appointed from senior administrative staff of the Novanet institutions, provided that the members are independent of the operations of Novanet and preparation of the financial statements, for a two year term

One of the two representatives selected by the Board of Directors will be the Chair of the Audit Committee. The two year term will be done on an alternate year basis to ensure continuity. Audit Committee members should be financially literate and at least one should have significant accounting or related financial experience.

Subcommittees and working groups are governed by the procedures outlined in the document “Process for Establishing Subcommittees and Working Groups”.

Limitations

  • A motion and vote is required for all Committee decisions.
  • The Audit Committee will provide a written report to the Board on all aspects of the Responsibilities of the Audit Committee at least once per year, and also at such other times and on all such matters as the Board may request.
  • The Audit Committee will annually review its mandate, self-assess its performance, and report its assessment to the Board.
Revised March 2008
Revised November 2008
Revised November 2010