Acting under the authority of the Board of Directors, the general purpose of the Committee is to assist the Board of Directors in overseeing issues relating to the development and management of financial and accounting information. In particular, the Committee is responsible for monitoring (i) the process according to which the financial information is developed, (ii) the efficiency of internal controls and risk management systems, (iii) the legal auditing of annual account statements and consolidated account statements as carried out by the external auditors, and the independence of such external auditors.
In fulfilling its role, as stated in its Internal rules as amended on 3 May 2011, the Committee is responsible for the following:
- to review the scope of consolidation and examine all draft consolidated and corporate financial statements and related reports which will be submitted to the Board for approval and to discuss them with Management and the external auditors;
- to review with Management and the external auditors the generally accepted accounting principles used in the preparation of the accounts including the review of alternative accounting principles, as well as any change in accounting principles, methods or rules while ensuring that such principles are still relevant;
- to examine and monitor the production process and the treatment of financial and accounting information used in the preparation of account statements;
- to evaluate the validity of the methods chosen for processing significant transactions as well as those transactions through which a conflict of interest could have occurred;
- to examine Management’s presentation on risk exposure (including legal risks) and significant off-balance sheet commitments and contingencies at the time of the Committee’s review of the accounts;
- to review and evaluate at least annually, the efficiency of internal control procedures and risk management procedures in place, including those associated with the development and treatment of financial and accounting information; the Committee ensures that the main risks are identified and managed, and that it is kept informed of their existence and status, it being specified that it shall receive the opinion of the Ethics, Compliance, and Sustainability Committee on the risk map concerning ethics and compliance, social responsibility and sustainable development and on the procedures in place for preventing the identified risks;
- to examine and review, on an annual basis, the organization and operation of the internal audit; the Committee approves the internal audit program, monitors its development and the results of its plans of action;
- to review with the external auditors the nature, scope, and results of their audit and work performed, and
- to review their comments and suggestions, in particular those relating to internal control and risk management procedures, to accounting practices and to the internal audit program;
- to examine and provide the Board of Directors with its opinion on the Chairman of the Board of Director’s draft report to shareholders at the general shareholders’ meeting on the internal controls and risk management procedures implemented by the Company;
- to review and control the call for tenders procedure associated with the selection of external auditors and provide the Board of Directors with a recommendation on the external auditors proposed for appointment by shareholders at the general shareholders’ meeting and on the amount of fees that the Company intends to pay them;
- to approve the External Audit Charter governing relations with the external auditors and examine, on an annual basis, the amount of the fees paid by the Group to the networks to which such external auditors belong, including fees that are not directly linked to the external auditors’ duties;
- to see to the external auditors’ independence, to examine with them, if applicable, the risks that are impacting such independence and the safety measures undertaken to mitigate these risks and grant its prior approval to any external audit performed that is accessory to or directly complementary to the audit of the accounts they are responsible for (excluding all other duties).
The Committee may also perform any other activities as the Committee or the Board of Directors deems necessary or appropriate. The Committee is entitled to seek any external assistance it may deem necessary.
Once a year, the Committee dedicates one of the items on its agenda to a debate concerning its functioning.
Unless the Committee decides differently, the External Auditors will attend meetings.