Audit Committee

(as amended by Board of Governors - 23 October 1998, 30 November 1989, 19 May 2004, 19 October 2006, 16 May 2007, 14 February 2008, 13 April 2012, 18 October 2012, Executive Comm 27 February 2015, Executive Comm-3 March 2017)
1. Committee Name
1.1  The Committee will be called the Audit Committee, hereinafter referred to as the Committee.
2.  Status
2.1  The Committee will be a standing committee of the Board of Governors, hereinafter referred to as the Board, of the University of New Brunswick, hereinafter referred to as the University.
2.2  The Committee is constituted and appointed by the Board pursuant to the Board's authority under Section 43 of the University of New Brunswick Act, hereinafter referred to as the Act, and is conferred with the authority to act for the Board with respect to the University as set out herein.
3. Mandate
3.1  This Committee is responsible to assist the Board in fulfilling its oversight responsibilities for the financial reporting process, the system of internal control and risk management, and the audit process.
4.  Scope of Duty
4.1  The Committee has the authority to request the services of professional advisors appropriate to fulfilling its responsibilities.  The Committee contributes to the overall governance of UNB by providing a culture of transparency, accountability, honesty and ethical behavior.
4.2  Financial Information
4.2.1  Review significant accounting and reporting issues, including complex or unusual transactions and highly judgmental areas, and recent professional and regulatory pronouncements, and understand their impact on the financial statements.
4.2.2  Review with managment and the external auditors the results of the audit, including any difficulties encountered.
4.2.3  Review the annual financial statements, and consider whether they are complete, consistent with information known to committee members, and reflect appropriate accounting principles.
4.2.4  Review with management and the external auditors all matters required to be communicated to the Committee under Generally Accepted Auditing Standards.
4.2.5  Understand how management develops interim financial information, for internal and external distribution and the nature and extent of internal and external auditor involvement.
4.3  Internal Control and Risk Management
4.3.1  Consider the effectiveness of the University's internal control system, including information technology security and control.
4.3.2  Understand the scope of internal and external auditors' review of internal control over financial reporting, and obtain reports on significant findings and recommendations, together with management's responses.
4.3.3  Review management's process for identifying, assessing and managing the principal business risks of the University.
4.3.4  Receive regular reports from management on areas of significant risk to the University including, but not limited to, legal claims, risk management report and other regulatory matters.
4.3.5  Review and report to the Board existence of adequate insurance protection pertaining to all property of the University including, buildings and property, liability security, fidelity and other insurable risks as recommended by management.
4.4  Internal Audit
4.4.1  Approve the annual audit plan and all major changes to the plan.  Review the internal audit activity's performance relative to its plan.
4.5  External Audit
4.5.1  Review the external auditors' proposed audit scope, approach and engagement letter.
4.5.2  Review the performance of the external auditors, and exercise final approval on the appointment or discharge of the  auditors.
4.5.3  Review and confirm the independence of the external auditors by obtaining statements from the auditors on relationships between the auditors and the University, including non-audit services, and discussing the relationships with the auditors.
4.5.4  On a regular basis, meet separately with the external auditors to discuss any matters that the Committee or auditors believe should be discussed privately.
4.6  Compliance
4.6.1  Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management's investigation and follow-up (including disciplinary action) of any instances of noncompliance.
4.6.2  Review the findings of any examinations by regulatory agencies, and any auditor observations.
4.6.3  Obtain regular updates from management and University's legal counsel regarding compliance matters.
4.7  Reporting Responsibilities
4.7.1  Regularly report to the Board of Governors about committee activities, issues, and related recommendations.
4.8  Other Responsibilities
4.8.1  Perform other activities related to this Terms of Reference as requested by the Board of Governors.
4.8.2  Institute and oversee special investigations as needed.
4.8.3  Review and assess the adequacy of the Terms of Reference a minimum of once every three years or as needed, requesting board approval for proposed changes, and ensure appropriate disclosure.

4.8.4  Confirm annually that all responsibilities outlined in this Terms of Reference have been carried out.

5. Composition

5.1  The Committee shall consist of:

Voting Members

  • At least three and not more than six members of the Board, who are not employees of the University (At least one member must have significant financial expertise, being an individual who is a professional accountant or auditor or has significant experience in financial matters).
  • A professional accountant who may or may not be a member of the Board.

       Non-voting (ex-officio)

  • President
  • Vice-President (Administration and Finance)
  • Comptroller
  • Assistant Vice-President Finance and Administration (SJ)

       Resources to the Committee:

  • Secretary (or designate) [Secretary]
  • Director of Risk Management

5.2  The committee is a technical rather than representative committee. Its members are appointed on the basis of their expertise and /or interest in accounting, law, or business administration. Committee members should be financially literate (defined as having the ability to read and understand financial statements of the breadth and complexity comparable to those of the University).

6.  Appointing Body

6.1  Appointments to the Committee are approved by the Board on the recommendation of the Board Nominating and Review Committee.

6.2  The goal of the Board Nominating and Review Committee is to promote the appointment of members with the knowledge, experience and skill sets relevant to the mandate of the Committee.  To assist the Board Nominating and Review Committee in establishing preferred selection criteria, the Committee may develop a matrix of general attributes and specific audit/financial-related skills that should be represented across the Committee membership.  An evaluation of the experience and skills of existing Committee members relative to these requirements will help identify potential gaps in knowledge, experience and skills that could be filled by new appointments to the Committee.

7.  Terms of Office

7.1  The normal term of office of members, other than ex-officio members, and advisors is three years.  Advisors shall be appointed for a term of up to three years.  Members and advisors are eligible for reappointment.

7.2  A member of the Committee, other than an ex-officio member, shall remain in office until a successor is appointed, provided, if the term of the member on the Board has expired, the seat is subject to continuance in office under the provision expressed in Section 26 of the University of New Brunswick Act.  A member appointed to the Committee to fill a vacancy in these circumstances shall assume office on the date of the appointment and shall hold office from that date and for a period determined by the Board.

7.3  A member of the Committee, other than an ex-officio member, shall ipso facto vacate the seat when the seat on the Board ipso facto becomes vacant under the provisions expressed in Section 27 of the Act.

7.4  A vacancy in the seat of a member of the Committee, other than the seat of an ex-officio member, shall be filled by the Board at or before the second meeting of the Board next following after the first occurrence of the vacancy.

8.  Committee Rules

8.1  Quorum

Quorum Committee quorum required to transact business requires a simple majority of voting Committee members and must include at least one Committee member with financial expertise.

 8.2  Voting Rule

The vote in favour of a resolution by a simple majority of voting Committee members present at the meeting will be     considered a resolution that is carried and endorsed by the Committee.

8.3  Committee Leadership

The Chair shall be appointed by the Board upon the recommendation of the Board Nominating and Review Committee.

8.4  Meeting format

The Committee will normally meet in person to conduct its business but, the Committee Chair may authorize a meeting, member attendance and/or voting by means of conference phone call and/or electronic media.

8.5  Frequency of Meetings

There shall be a minimum of three meetings per year with each having the following primary purpose:

  • The first meeting of the calendar year is to review the annual report on Risk management, to review the annual internal audit plan and to monitor progress on internal control recommendations.
  • The second meeting's primaty purpose is to review the external audit plan.
  • The third meeting's primary purpose is to review the annual audited financial statements, external auditor's reports and findings.

 Additional meetings may be scheduled if deemed necessary by the Chair.

8.6  Open and Closed Sessions

Meetings of the Committee shall be held in closed sessions unless the Committee resolves to carry out a meeting or part of a meeting in open session.

 8.7  Attendance by Others

The Committee Chair or the President may authorize the attendance of non-Committee members at a Committee meeting and will notify the Secretary accordingly.  The Committee Chair may grant speaking privileges to such individuals.  No voting privileges will be granted.

 8.8  Annual Committee Assessment

Conduct annual self-assessment of the performance of the Committee against its terms of reference and report its findings to the Board.