Audit & Risk Committee
The Purpose of the Risk & Audit Committee (RAC) is to assist the Board of Directors (BOD) in fulfilling the following:
- The BOD’s oversight responsibilities related to present and emerging risk issues associated with the Company’s activities.
- The BOD’s oversight responsibilities for the financial reporting process, the system of internal control, the audit process, and the Company’s process for monitoring compliance with laws, regulations and the code of conduct.
Duties & Responsibilities:
- Provide sufficient resources and adequate systems to the Risk Management Department (RMD);
- Evaluate the systems and mechanisms for identifying and monitoring various risks that the Company may be exposed to;
- Review the Organization Structure of the RMD and submit its recommendations in this regard, prior to its approval from the BOD;
- Review and recommend to the BOD the establishment of the Company’s overall risk tolerance, risk appetite, and overall risk framework, and receive reports from management regarding the Company’s policies and procedures relating to the same;
- Oversee the strategies, policies, procedures, and systems established by management to identify, assess, measure and manage the major risks facing the Company, and prepare periodic reports regarding the nature of these risks and submit the same to the BOD;
- Annually evaluate the Group’s governance, risk and control framework to satisfy itself on the design and completeness of the framework relative to the Group’s activities and risk profile;
- Regularly monitor the Company’s risk profile against the agreed appetite; and
- Ensure that the staff of the RMD are independent of the activities that lead to risk exposure.
- Review significant accounting and reporting issues, including complex, unusual transactions, highly judgmental areas, and recent professional and regulatory pronouncements, and understand their impact on the financial statements and provide opinion and recommendation to the BOD;
- Review the financial statements periodically before submitting to the BOD, and submit recommendations in this regard to the BOD to ensure transparency and fairness of the financial reports, and review with management and the external auditors the results of the audit;
- Evaluate the adequacy of the Company’s internal control systems and prepare Internal Control Review Report including the opinion and any recommendations;
- Review with management and the Chief Internal Auditor the charter, activities, staffing, and organizational structure of the internal audit function;
- Recommend the recruitment, transfer, and termination of the Chief Internal Auditor and evaluate the performance of the internal audit department;
- Revise and adopt the proposed audit plan prepared by the internal auditor and provide its opinion on the same; Review the effectiveness of the internal audit function, including compliance with the Institute of Internal Auditors' International Professional Practices Framework for Internal Auditing consisting of the Definition of Internal Auditing, Code of Ethics and the Standards;
- Review the results of the internal audit reports and ensures that the corrective procedures have been taken regarding the observations which are contained in the report;
- Supervise the Internal Audit Department in order to verify the extent of its effectiveness in performing its prescribed duties defined by the BOD;
- Review the external auditors' proposed audit scope and approach, including coordination of the audit effort with internal audit, and submit the committee’s recommendations to the BOD regarding appointment and reappointment of external auditor as well as determination of fees;
- Ensure that the external auditor is independent of the Company and its BOD and that the external auditor does not perform any additional tasks for the Company that is not included within the tasks of reviewing that could affect their impartiality or independence;
- Review the effectiveness of the system for monitoring compliance with laws and regulations and the results of management's investigation and follow-up of any instances of noncompliance;
- Review the results of the regulatory authorities reports, and ensures that the necessary procedures have been taken in this regard; and
- Ensure compliance with the relevant laws, regulations, and instructions as well as obtain regular updates from management and company legal counsel regarding compliance matters.