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  • HC-3 HC-3 Audit Committee and Financial Statements Certification

    • HC-3.1 HC-3.1 Principle

      • HC-3.1.1

        The Board of all licensees must have rigorous controls for financial audit and reporting, internal control, and compliance with law.

        October 2019

    • HC-3.2 HC-3.2 Audit Committee

      • HC-3.2.1

        The Board of licensees should establish an audit committee commensurate with the size, complexity and nature of its business. The audit committee should consider having at least three directors.

        October 2019

      • HC-3.2.2

        The majority of the directors should be independent including the Chairman.

        October 2019

      • HC-3.2.3

        Where there is an audit committee, it must:

        (a) Review the company's accounting and financial practices;
        (b) Review the integrity of the licensees' financial and internal controls and financial statements;
        (c) Review the licensees' compliance with legal requirements;
        (d) Recommend the appointment, compensation and oversight of the licensees' external auditor; and
        (e) Recommend the appointment of the internal auditor (whether in-house or outsourced).
        October 2019

      • HC-3.2.4

        The Board or Audit Committee must ensure that the external audit firm and its partners are truly independent of the licensee and have no financial or other relationship with the licensee. Audit findings must be used as an independent check on the information received from management about the licensees' operations and performance and the effectiveness of internal controls.

        October 2019

    • HC-3.3 HC-3.3 Audit Committee Charter

      • HC-3.3.1

        The audit committee should adopt a written charter which shall, at a minimum, state the duties outlined in Paragraph HC-3.2.4.

        Amended: April 2020
        Added: October 2019

      • HC-3.3.2

        A majority of the audit committee should have the financial literacy and information technology qualifications.

        Amended: April 2020
        Added: October 2019

      • HC-3.3.3

        The Board should adopt a "whistleblower" program under which employees can confidentially raise concerns about possible improprieties in financial or legal matters. Under the program, concerns may be communicated directly to any audit committee member or, alternatively, to an identified officer or employee who will report directly to the Audit Committee on this point.

        October 2019

    • HC-3.4 HC-3.4 CEO and CFO Certification of Financial Reporting

      • HC-3.4.1

        The licensee's CEO and chief financial officer must state in writing to the audit committee and the Board as a whole the licensee's annual and, where applicable, interim financial statements present a true and fair view, in all material respects, of the licensee's financial condition and results of operations in accordance with applicable accounting standards.

        October 2019