52-509 - Audit Committees [BCI - Rescinded]
| Published Date: | 2005-05-06 |
|---|---|
| Effective Date: | 2005-07-01 |
Concurrently Published:
Contents
1 Definitions
2 Interpretation
3 Application
4 Audit committee
5 Requirements of the audit committee
6 Disclosure and filing requirements
7 Transition
Definitions
1 In this Instrument,
“MI 52-110” means Multilateral Instrument52-110 Audit Committees as enacted or adopted by the securities regulatory authorities of Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Saskatchewan and Yukon;
“significant securityholder” means, in relation to an issuer, a securityholder that
(a) owns or controls 10% or more of any class of the issuer’s voting securities, or
(b) is able to affect materially the control of the issuer, whether alone or by acting in concert with others.
Interpretation
2 In this Instrument, a director of an issuer is independent if
(a) a reasonable person with knowledge of all the relevant circumstances would conclude that the director is independent of management of the issuer and of any significant securityholder, or
(b) the issuer is a reporting issuer in a jurisdiction other than British Columbia and the director is independent under MI 52-110.
Application
3 This Instrument applies to a reporting issuer, and its board of directors, unless the reporting issuer is
(a) in compliance with MI 52-110,
(b) an investment fund, or an issuer of asset-backed securities, as defined in National Instrument 51-102 Continuous Disclosure Obligations,
(c) a designated foreign issuer, or an SEC foreign issuer, as defined in National Instrument 71-102 Continuous Disclosure and Other Exemptions Relating to Foreign Issuers,
(d) an exchangeable security issuer that is exempt from NI 51-102 Continuous Disclosure Obligations under section 13.3 of that Instrument, or
(e) a credit support issuer that is exempt from NI 51-102 Continuous Disclosure Obligations under section 13.4 of that Instrument.
Audit committee
4 (1) This section does not apply to a reporting issuer, or its board of directors, if the board
(a) consists of fewer than five directors, and
(b) performs the requirements referred to in section 5.
(2) The board of directors of a reporting issuer must appoint an audit committee.
(3) A majority of the members of the audit committee must be independent.
(4) The board of directors of a reporting issuer must take reasonable steps to ensure that its audit committee is independent of the issuer’s management and represents the interests of all of the issuer’s securityholders, as part of the committee members’ duties as directors.
(5) The audit committee may approve the issuer’s financial statements for an interim period, or the related management’s discussion and analysis, on behalf of the board if the board of directors has authorized it to do so.
Requirements of the audit committee
5 The audit committee of a reporting issuer must
(a) oversee the process of selecting and appointing an auditor,
(b) oversee the conduct of the audit,
(c) take reasonable steps to ensure that the auditor is independent of the issuer in accordance with applicable standards,
(d) determine that the audit fees charged by the auditor with respect to the audit are, in the opinion of the audit committee, appropriate in relation to the work required to support an audit opinion, without regard to fees that are paid, payable or might be paid to the auditor for other services,
(e) determine the scope and terms of reference of the audit engagement and the process by which and the terms under which the auditor formally reports to the issuer,
(f) meet with the auditor, regularly at a frequency that is reasonable in the circumstances and when otherwise reasonably necessary, without management present, to determine whether there are any disagreements between the auditor and management relating to the issuer’s financial disclosure and, if so, whether those issues have been resolved to the auditor’s satisfaction,
(g) establish and monitor compliance with the issuer’s policies regarding
(i) the auditor’s provision of services beyond the scope of the issuer’s audit, and
(ii) the issuer’s hiring of individuals formerly employed by the auditor to fill senior officer positions of the issuer, and
(h) prepare annually a report to the shareholders describing the steps it has taken to ensure that the auditor is independent of the issuer, including
(i) the policies and procedures followed so that any contracts for non-audit services with the auditor do not compromise the auditor’s independence, and
(ii) the nature of any non-audit service contracts with the auditor and the amount of the related fees.
Disclosure and Filing Requirements
6 A reporting issuer must disclose the following information in its management information circular or, if the issuer is not required to file a management information circular, in its annual information form:
(a) the name of
(i) each member of the audit committee, or
(ii) each director, if the board of directors performs the responsibilities of the audit committee;
(b) for each person named under paragraph (a), whether the person is independent or not independent, and the circumstances that led to that determination;
(c) the report required under section 5(h).
Transition
7. Section 6 does not apply to a management information circular, or an annual information form, that is required to be filed for a financial year ending on or before June 29, 2005.