Audit Committee charter

1. Mandate

1.1 The mandate of the Audit Committee is to assist the Board of Management in fulfilling its oversight responsibilities by reviewing the Agency's accounting framework, financial and performance information, internal controls and risk tolerance, and compliance with financial legislation.

2. Composition

2.1 The Committee will be comprised of a minimum of three directors from the Board, including a Chair and a Vice-Chair.

2.2 The CRA's Commissioner is not a member of the Committee.

2.3 Based upon changes in Board membership throughout the year, and/or on an annual basis, the Chair of the Board, in consultation with the Chair of the Committee, will review the composition of the Committee and recommend to the Board any changes in Committee membership. All changes in Committee membership will be approved by resolution of the Board at the earliest opportunity.

2.4 All members of the Committee shall be independent of the Agency. The Commissioner, the Chief Financial Officer, Chief Audit Executive, and a representative of the Office of the Auditor General of Canada shall each attend as observers in regular closed sessions of Committee meetings. Any other person not having business before the committee (i.e. not on the agenda for a particular meeting) may attend the meeting if approved by the Chair of the Committee 24 hours prior to the meeting. Any request to attend a meeting shall be submitted in writing to the Corporate Secretary no less than 48 hours prior to the meeting. This clause does not preclude any member of the Board who is independent of Agency management from attending Audit Committee meetings as an observer.

2.5 All Committee members will have the ability to read and understand a set of financial statements and be familiar with financial and performance reporting practices. At least one member of the Committee will have an accounting designation (CPA).

3. Responsibilities and duties

3.1 To fulfill the mandate bestowed upon it by the Board, the Committee will:

  1. thoroughly review financial information and management's certifications of it in the annual Financial Statements – Agency Activities, and – Administered Activities, and other financial reports such as the Agency’s quarterly financial reports to determine whether the statements are materially accurate, and when appropriate, recommend their approval to the Board.
  2. review with management changes to accounting policies, disclosures, practices, key estimates and judgements to determine whether they are fair, accurate and prudent;
  3. review the Internal Audit Policy and the Evaluation Policy and recommend them to the Board for approval;
  4. review, periodically, the Audit Committee's relationship with the AERB;
  5. provide input into the performance assessment of the CAE;
  6. review with management and the Office of the Auditor General the identification and assessment of any significant financial risks to the Agency;
  7. periodically review the sufficiency of internal controls and any significant deviations from them with the Chief Audit Executive, the Chief Financial Officer and the Office of the Auditor General;
  8. review and, when appropriate, make recommendations to the Board on the Agency’s compliance with financial legislation, regulations, and policies;
  9. review and recommend to the Board, for approval, the periodic, but at least annual, Risk-Based Assurance and Advisory Plan;
  10. review the Chief Audit Executive’s Annual Report ;
  11. review and where deemed appropriate, recommend for approval by the Commissioner, the internal audit or evaluation reports provided by the Chief Audit Executive;
  12. review, monitor the progress of, and make recommendations to the Agency on action plans and timelines developed in response to internal audit and evaluation reports by the Chief Audit Executive, the Office of the Auditor General, and all other external audit and evaluations;
  13. review the plans of the Audit, Evaluation, and Risk Branch and the Office of the Auditor General to determine whether the combined evaluation and testing of internal financial controls is comprehensive and coordinated;
  14. review with the Office of the Auditor General the areas of special emphasis to be addressed in the planned audits, the materiality levels which the Office of the Auditor General proposes to employ, and other issues which are appropriate in the view of the Committee or the Office of the Auditor General;
  15. review reports from the Office of the Auditor General on the audited financial statements of the Agency, and any other audits or assessments pertaining to the Agency performed by the Office of the Auditor General and, when appropriate, make recommendations to the Board;
  16. ensure sufficient procedures are in place to receive and handle complaints or concerns received by the Agency about accounting, internal accounting controls and audit matters including those submitted anonymously by employees of the Agency, and receive regular reports on such procedures, and complaints, and concerns received;
  17. review the annual report on internal disclosures within the CRA provided by the CRA to the Treasury Board Secretariat, as well as any other reports that the CRA’s Senior Officer for Internal Disclosure may provide to the Committee, in order to ensure procedures regarding internal disclosure are being followed in accordance with the provisions of the Public Servants Disclosure Protection Act;
  18. respond annually to the Office of the Auditor General confirming knowledge of any instances of fraud or error affecting the Agency;
  19. review and investigate any matters pertaining to the integrity of the Commissioner of the Agency and all direct reports to the Commissioner of the Agency;
  20. develop an Audit Committee work plan on an annual basis, identifying priorities and objectives;
  21. undertake any other duties the Board may delegate to the Committee;
  22. meet jointly with the Resources Committee, on a quarterly basis, to discuss oversight areas of shared interest and/or responsibility such as the management of funds, financial risk, or other matters deemed appropriate by the Board and Committee Chairs.

3.2 In discharging their duties under this mandate, each member of the Committee shall be obliged to exercise the care, diligence and skill a reasonable person would exercise in comparable circumstances.

3.3 In discharging its duties under this mandate, the Committee may seek and rely in good faith upon any report of a lawyer, accountant, and officer of the Agency or any other person whose profession provides credibility to the statement made by such person.

4. Operating procedures

4.1 Meetings

Meetings of the Committee will take place in accordance with the procedures set out in sections 9, 17, and 18 of Board of Management by-law #1. All meetings of the Committee are closed meetings. At the start and at the end of each meeting of the Committee, there may be an in camera session for independent Board members scheduled on the agenda. There may also be an in camera session with the Commissioner scheduled on the agenda, at the beginning and/or the end of each meeting of the Committee.

If the Committee so chooses, it may call the Chief Audit Executive to attend either a portion of, or an entire in camera session. Similarly, if the Committee so chooses, it may call an official from the Office of the Auditor General to attend either a portion of, or an entire, in camera session. Whenever an official from the Office of the Auditor General attends an in camera session, the Commissioner and/or the Chief Audit Executive shall attend as observer(s).

The Committee will hold, at each quarterly meeting, an in camera session with the Chief Audit Executive.

Directors, who are not members of the Committee, may attend the regular and/or in camera sessions as observers, upon consent of the Committee Chair.

The Chair of the Committee may adopt any combination of in camera sessions as they may deem appropriate.

Section 7.1 of the Board of Management Governance Manual, "Meeting Modalities", defines and describes the procedures for closed and in camera meetings / sessions.

4.2 Absence of Committee Chair

In the absence of the Committee Chair, the Committee Vice-Chair will act as Chair.

4.3 Secretary

Unless the Committee specifies otherwise, the Corporate Secretary will act as Secretary for all meetings of the Committee.

4.4 Reporting to the Board

The Committee, through its Chair, will report to the Board, in an abridged manner, on the day following the regularly scheduled Committee meetings while ensuring the following elements are included in the report:

4.5 Minutes

Minutes of each meeting of the Committee will be prepared by the Secretary or her/his staff and provided to members for review and approval at the next meeting of the Committee. The Chair will, as required, brief the Corporate Secretary and the Commissioner following in camera sessions.

4.6 Reading material

Reading material for each Committee meeting will be available in both official languages and provided to Committee members by the Corporate Secretary. Every effort is to be made to allow Committee members at least two weekends for review of the material before the meetings. Committee members will be expected to have read the material prior to the meeting and thus will be expected to participate fully in Committee discussions on the subject matter contained within the reading material.

4.7 Legal Advice

At any time Committee members may seek legal advice from the legal counsel assigned to the Board of Management by the CRA. All requests for advice will be made in writing to the Agency's legal counsel, with a copy provided to the Corporate Secretary.

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