To assist the Board of Directors of Ajman Bank in fulfilling its oversight responsibilities in ensuring that the following are fully complied with in accordance with applicable law:
- financial reporting process;
- the system of internal control over financial reporting;
- the audit process; and
- process for monitoring compliance with laws and regulations and the Code of Conduct.
The Audit Committee has authority to conduct or authorise investigations into any matters within its scope of responsibility. Specifically, it is empowered to:
- retain outside counsel, accountants, investigators or other professionals to advise the Audit Committee or assist in the conduct of an investigation;
- seek any information it requires from employees - all of whom are directed to co-operate with the Audit Committee's requests - or external parties;
- meet with Bank's officers, external auditors, General Counsel and outside counsel, as necessary.
- All decisions are to be taken by a simple majority. The casting vote in the event of a tie will be that of the Chairman.
- The Audit Committee will consist of three non executive members of the Board of Directors.
- Majority of the Audit Committee members will comprise of independent members who will be financially literate. At least one member should have expertise in financial reporting.
- The Board will appoint Audit Committee members and the Audit Committee Chairman.
- The Chairman of the Board will not be a member of the Audit Committee.
- The Committee Chairman will appoint a secretary to the Committee.
- The Audit Committee will meet at least once in three months (four times a year), with authority to convene additional meetings, as circumstances require. All Audit Committee members are expected to attend each meeting in person or telephonically, or by circulation of documents.
- Majority of the members must be present in order for a quorum to be achieved at the meeting.
- The Audit Committee may invite members of management, regulators, auditors or others to attend meetings and provide pertinent information, as necessary. All such invitees will be made aware of their on-going obligations of confidentiality at the beginning of each meeting. The Audit Committee may hold private meetings with auditors and executive sessions as it deems necessary.
- Meeting agendas will be prepared and provided in advance to members, along with appropriate briefing materials. Minutes will be prepared and submitted on a timely basis.
The Audit Committee will carry out the following responsibilities:
- Review significant accounting and reporting issues - including complex or unusual transactions and highly judgmental areas - as well as recent professional and regulatory pronouncements, and formally note their impact on the financial statements.
- Review with management and the external auditors the results of an audit, including any difficulties encountered.
- Review the annual (and, as needed, interim) financial statements, and consider whether they are complete, consistent with information known to Audit Committee members, and reflect appropriate accounting principles, in accordance with International Financial Reporting Standards (IFRS).
- Review other sections of the annual report before release and consider the accuracy and completeness of the information contained therein and its consistency with the financial statements.
- Review with management and the external auditors all matters required to be communicated to the Audit Committee under International Standards on Auditing.
- Understand how management develops interim financial information, and the nature and extent of internal and external auditor involvement in their preparation and review.
- Review interim financial reports with management and the external auditors. Consider whether they are complete and consistent with the information known to Audit Committee members.
- Review and approve the charter, plans and organizational structure of the internal audit function with management and the internal audit manager.
- Ensure that there are no unjustified restrictions or limitations, and review and concur with the appointment, replacement or dismissal of the internal audit manager.
- Review the effectiveness of the internal audit function on a regular basis, and meet separately with the internal audit manager to discuss any matters that the Audit Committee or internal audit believes should be discussed privately.
- Review internal audit reports and recommend to the Board the action steps required to mitigate issues raised by Internal Audit.
- Review the external auditors' proposed audit scope and approach, including co-ordination of audit effort with internal audit.
- Review external auditor's reports and discuss significant accounting and audit issues with AB's external auditors.
- Review the performance of the external auditors, and exercise final approval on the appointment or discharge of the auditors.
- Review and confirm the independence of the external auditors by obtaining statements from the auditors on relationships between the auditors and AB, including non-audit services.
- On a regular basis, meet separately with the external auditors to discuss any matters that the Audit Committee or auditors believe should be discussed privately.
- 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 non-compliance.
- Review the findings of any examination by Government auditors, and any auditor observations.
- Review the process for communicating the code of conduct to AB personnel, and for monitoring compliance therewith and enforcement thereof.
- Obtain regular updates from management and legal counsel regarding compliance matters.
- Ensure AB's compliance with anti-money laundering regulations and other relevant legislation issued by the UAE Central Bank and/or ESCA.
- Regularly report to the Board of Directors about Audit Committee activities, issues and related recommendations.
- Provide an open avenue of communication between internal audit, the external auditors and the Board of Directors.
- Report annually, describing the Audit Committee's composition, responsibilities and how they are discharged, and
- Review any other reports that relate to Audit Committee responsibilities.
- Perform other activities related to this charter as requested by the Board of Directors.
- Review UAE Central Bank's inspection report (wherever applicable) and recommend to the Board the action steps required to mitigate the issues raised (if applicable).
- Institute and oversee special investigations as needed.
- Review and assess the adequacy of the Audit Committee charter annually, requesting Board approval for proposed changes.
- Confirm annually that all responsibilities outlined in this charter have been carried out.
- Liaise with the Audit Committees of other banks to ensure consistency of approach.