Audit Committee Guidelines
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Purpose and Objectives
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1.1 Purpose:
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The Audit Committee ("Committee") is established to assist the Board of Directors in fulfilling its oversight responsibilities relating to financial reporting, internal controls, risk management, and compliance.
1.2 Objectives:
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Review the integrity of the company's financial statements and related disclosures.
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Assess the effectiveness of the company's internal controls and risk management systems.
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Oversee the independent audit process and the performance of the external auditors.
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Promote compliance with applicable laws, regulations, and ethical standards.
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Maintain open lines of communication between the Board, management, internal auditors, and external auditors.
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Committee Composition and Meetings
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2.1 Composition:
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The Committee shall consist of at least two members, all of whom shall be independent directors with relevant financial expertise.
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The Committee Chair shall be appointed by the Board and shall have a strong understanding of financial reporting and auditing.
2.2 Meetings:
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The Committee shall meet at least twice annually, or more frequently as necessary.
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Additional meetings may be called by the Committee Chair or upon request of any Committee member, management, internal auditors, or external auditors.
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Adequate notice and supporting materials shall be provided for all meetings.
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Responsibilities and Duties
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3.1 Financial Reporting and Disclosures:
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Review and discuss the company's financial statements and related disclosures with management and external auditors.
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Assess the appropriateness and consistency of accounting policies and practices.
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Monitor significant financial reporting issues and judgments, including any changes in accounting standards.
3.2 Internal Controls and Risk Management:
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Evaluate the adequacy and effectiveness of the company's internal controls and risk management systems.
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Review the findings and recommendations of internal auditors and ensure appropriate follow-up actions are taken.
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Monitor the identification, assessment, and mitigation of significant risks.
3.3 External Audit Process:
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Select, evaluate, and recommend the appointment or reappointment of the external auditors to the Board.
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Approve the scope of the external audit, including any non-audit services provided by the auditors.
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Review the performance and independence of the external auditors.
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Discuss the audit plan, significant audit findings, and any disagreements with management or auditors.
3.4 Compliance and Legal Matters:
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Oversee the company's compliance with legal and regulatory requirements.
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Review the effectiveness of the company's compliance programs and ethics policies.
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Monitor any legal or regulatory matters that may have a significant impact on the financial statements or operations.
3.5 Reporting and Communication:
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Provide regular reports to the Board on the Committee's activities, significant findings, and recommendations.
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Maintain open lines of communication with management, internal auditors, and external auditors.
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Conduct private sessions with the internal auditors and external auditors, without the presence of management, as necessary.
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Resources and Authority
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4.1 Resources:
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The Committee shall have the authority to engage independent advisors or consultants as necessary to fulfill its responsibilities.
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The company shall provide adequate resources, budget, and support staff to assist the Committee in carrying out its duties.
4.2 Authority:
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The Committee shall have the authority to access all company records, systems, and personnel necessary to perform its duties.
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The Committee's recommendations and findings shall be presented to the Board for consideration and appropriate action.
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These guidelines outline the roles, responsibilities, and duties of the Audit Committee of Killay Corp. It ensures transparency, accountability, and ethical conduct throughout the organization, promoting long-term value creation. It is subject to periodic review and updates to align with evolving governance best practices and legal requirements.