Audit committee terms of reference

The Audit Committee is a standing committee of the Board of Governors reporting directly to the Board of Governors.

The Audit Committee’s responsibility is to provide assistance to the Board of Governors in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting, internal control and financially related legal compliance functions of the University.

The Audit Committee will review, comment upon and/or recommend to the Board of Governors on the following areas:

Financial reporting

The draft annual financial statements of the University of Ottawa and of the University of Ottawa Retirement Pension Plan (1965), including the review and discussion of the following: 

• compliance with generally accepted accounting principles (GAAP) and with presentation and disclosure standards;
• quality and completeness of financial disclosures including the procedures for disclosure of financial information;
• quality and appropriateness of GAAP, including benchmarking with the industry;
• significant variances between comparative periods;
• management’s recommendations on resolution of areas of concern identified within the financial reporting process;
• proposed changes in accounting standards, policies, regulations, key estimates and judgments that may be material to financial reporting;

Risk management and control environment

• management’s report on the risk assessment process identifying and managing the principal business risks in order to satisfy themselves that the process operates efficiently;
• management’s report on the management of financial risks to ensure they are being effectively managed and controlled;
• the External Auditor’s and/or the Internal Auditor’s review of management’s assessment of significant financial risks;
• reports from management when significant control deviations or indications of fraud occur, and how such control breakdowns have been corrected;
• reports from the Internal Auditor’s review of senior management expense accounts;
• the confirmation by management of the University’s compliance with tax and financial reporting laws and regulations;

External audit

• the scope of the External Auditor’s examination of the annual financial statements;
• the content of any management letters received from the External Auditor, and management’s responses and action plans;
• the External Auditor’s opinion addressed to the Board;
• the annual appointment of the External Auditor and the remuneration to be paid for the regular annual audit;
• the confirmation of the External Auditor’s independence;
• any other audit and non-audit engagement performed by the External Auditor in addition to the regular annual audit and the remuneration to be paid thereof;
• the monitoring of the quality and effectiveness of the External Auditor’s relationship with management;

Internal audit

• the policies and procedures for internal audit, to ensure that they meet the audit requirement of the University as determined by the University of Ottawa Act, By-Laws and Board approved policies;
• the President’s recommendation on the appointment of the Internal Auditor;
• the maintenance of reasonable degree of independence by the Internal Auditor in carrying out the duties of the Office;
• the existence of adequate coordination and cooperation between the internal and external audit functions;
• the terms of reference, the budget, the audit plan and the annual report of the Internal Auditor;
• specific reports of the Internal Audit Office as required, including management’s response to findings and to recommendations, and follow-up on action plans;

Other audits

• any other audit reports issued by external agencies or funding councils.

The Audit Committee shall consist of at least four (4) Board members - other than the Chairperson and Vice-chairperson of the Board - appointed by the Board of Governors, one of whom shall be a member of the Executive Committee. Only those Board members not employed by the University and appointed under Section 9 b, c, e, and f of the University of Ottawa Act 1965 are eligible. All members of the Audit Committee shall be financially literate (sufficiently versed in financial matters to understand the University’s accounting practices and policies and the major judgments involved in preparing the financial statements) and at least one member shall have financial expertise.

Officers

The Chairperson and the Vice-chairperson of the Committee are elected by the Governance Committee. The Secretary of the University is the Secretary of the Committee.

In general, members are appointed for a minimum term of two years, renewable.

Quorum

A majority of members constitutes a quorum.

Operating procedures

The Audit Committee will meet sufficiently within a year to support its responsibilities and report to the Board at its regular meetings after each meeting held by the Audit Committee.

The Audit Committee, in consultation with management and the external auditors, shall develop an annual work plan responsive to the Audit Committee responsibilities.

Audit Committee meeting agendas shall be the responsibility of the Chairperson of the Committee in consultation with the Committee members, management, the External Auditor and Internal Auditor.

Minutes of the meetings of the Audit Committee will be retained by the Secretary’s office and each and every member of the Board of Governors will have access thereto.

The External Auditor and the Internal Auditor shall be invited and such other University officers as may be invited from time to time, may participate at meetings of the Audit Committee.

In general, members of the Committee shall meet in private sessions with the External Auditor, with the Internal Auditor, with management, and with the Committee members only.