AUDIT COMMITTEE
TERMS OF REFERENCE

External Audit

The University Act specifies that the Auditor General is to be appointed the External Auditor of UBC.  The Auditor General can appoint an agent to carry out the audit under its supervision.

The External Auditor reports directly to the Audit Committee.

In overseeing the external audit, the Audit Committee shall:

Before the Audit:

  • Review the terms of External Auditor engagement and the appropriateness and reasonableness of the proposed audit fees.
  • Review the audit plan with the External Auditor and Management, and discuss the timing and extent of the audit work, materiality, audit risk, and overall audit strategy.
  • Review the audit scope with the External Auditor and Management and ensure no restrictions have been placed by Management on the scope of the audit.
  • Ensure the Internal Auditor and the External Auditor coordinate internal and external audits.

During the Audit:

  • Determine whether Management has provided full and open disclosure to the External Auditor’s inquiries.
  • Review problems experienced by the External Auditor in performing the audit, including any restrictions imposed by Management and all significant accounting issues on which there was disagreement with Management.
  • Obtain explanations from Management on all significant variations between comparative reporting periods.
  • Ensure that Management and the External Auditor fully inform the Audit Committee about any financial irregularities, regulatory investigations, potential liabilities, or other sensitive information.
  • Ensure that the External Auditor informs the Committee about material misstatements, whether adjusted or not.
  • Review audit conclusions regarding significant accounting estimates.

After the Audit:

  • Determine whether the performance of the External Auditor is satisfactory and effective and meets the requirements of the University.
  • Discuss with the External Auditor their independence and how it has been maintained.
  • Review the post-audit or management letter containing the recommendations of the External Auditor; review Management’s response and subsequent follow-up to any significant identified weaknesses.
  • Obtain information on the nature of all non-audit services provided by the External Auditor; the Committee should review the contracts for same and consider the impact on the External Auditor’s independence.

Other:

  • Review all issues related to any change of the External Auditor and plans to ensure an orderly transition.
  • Review any other financial reports and disclosure documents provided by the External or Internal Auditors or other appropriate officers of the University.
  • Meet with the External Auditors without Management present, as part of the regular Audit Committee agenda.