Audit Committee Charter May 2008
Description
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS Purpose The primary purposes of the Audit Committee (the “Committee”) are to oversee on behalf of the Board of Directors (“Board”) of Gold Reserve Inc. (the “Company”): • the Company’s accounting and financial reporting processes and the integrity of its financial statements; • the audits of the Company’s financial statements and the appointment, compensation, qualifications, independence and performance of the Company’s independent auditors; and • the Company’s compliance with legal and regulatory requirements. The Committee also has the purpose of preparing the financial report that rules of the U.S. Securities and Exchange Commission (the “SEC”) or the Ontario Securities Commission (the “OSC”) require the Company to include in its annual proxy or information statement and Annual report with the SEC and/or its equivalent filed with the OSC. The Committee’s function is one of oversight only and does not relieve management of its responsibilities for preparing financial statements that accurately and fairly present the Company’s financial results and condition, nor the independent auditors of their responsibilities relating to the audit or review of financial statements. Organization The Committee shall consist of at least three directors. The Board shall designate a Committee member as the chairperson of the Committee, or if the Board does not do so, the Committee ...
Informations
| Publié par | Tanid |
| Nombre de lectures | 16 |
| Langue | English |
Extrait
May 2008
1
CHARTER OF THE
AUDIT COMMITTEE OF
THE BOARD OF DIRECTORS
Purpose
The primary purposes of the Audit Committee (the “Committee”) are to oversee on behalf of the
Board of Directors (“Board”) of Gold Reserve Inc. (the “Company”):
•
the Company’s accounting and financial reporting processes and the integrity of its financial
statements;
•
the audits of the Company’s financial statements and the appointment, compensation,
qualifications, independence and performance of the Company’s independent auditors; and
•
the Company’s compliance with legal and regulatory requirements.
The Committee also has the purpose of preparing the financial report that rules of the U.S. Securities
and Exchange Commission (the “SEC”) or the Ontario Securities Commission (the “OSC”) require
the Company to include in its annual proxy or information statement and
Annual report with the SEC
and/or its equivalent filed with the OSC.
The Committee’s function is one of oversight only and does not relieve management of its
responsibilities for preparing financial statements that accurately and fairly present the Company’s
financial results and condition, nor the independent auditors of their responsibilities relating to the
audit or review of financial statements.
Organization
The Committee shall consist of at least three directors.
The Board shall designate a Committee
member as the chairperson of the Committee, or if the Board does not do so, the Committee members
shall appoint a Committee member as chairperson by a majority vote of the authorized number of
Committee members.
All Committee members shall be “independent,” as defined and to the extent required in the
applicable SEC and OSC rules and American Stock Exchange (“AMEX”) and Toronto Stock
Exchange (“TSX”) listing standards and applicable laws and regulations, as they may be amended
from time to time (collectively, such SEC and exchange requirements are referred to as the “listing
standards”), for purposes of audit committee membership.
Notwithstanding the foregoing, one director who is not independent as defined by the AMEX
listing standards, but who satisfies the requirements of Rule 10A-3 under the Securities
Exchange Act of 1934, and is not a current officer or employee or an immediate family member
of such officer or employee, may be appointed to the Committee if the Board, under exceptional
and limited circumstances, determines that membership on the Committee by the individual is
in the best interests of the Company and its shareholders, and the Board discloses, in the next
periodic filing made with the SEC subsequent to such determination, the nature of the
relationship and the reasons for that determination; provided, however, that any such non-
independent Committee member may only serve on the Committee for two (2) years and may
not serve as the chairperson of the Committee.
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Each Committee member shall be able to read and understand fundamental financial statements,
including the Company’s balance sheet, income statement, and cashflow statement upon appointment
to the Committee. At all times there shall be at least one member of the Committee who, in the
Board’s business judgment, is an audit committee “financial expert” as defined in the SEC rules and
is “financially sophisticated” as defined in the AMEX listing standards.
Subject to the requirements of the listing standards, the Board may appoint and remove Committee
members in accordance with the Company’s by-laws.
Committee members shall serve for such terms
as may be fixed by the Board, and in any case at the will of the Board whether or not a specific term
is fixed.
Independent Auditors and Their Services
The Committee shall have the sole authority and direct responsibility for the appointment,
compensation, retention, termination, evaluation and oversight of the work of the independent
auditors engaged by the Company for purposes of preparing or issuing an audit report or related work
or performing other audit, review or attest services for the Company. The independent auditors shall
report directly to the Committee.
The Committee’s authority includes the resolution of disagreements
between management and the auditors regarding financial reporting.
The Committee shall pre-approve all audit, review, attest and permissible non-audit services to be
provided to the Company or its subsidiaries by the independent auditors.
The Committee may
establish pre-approval policies and procedures in compliance with applicable listing standards.
The
Committee shall obtain and review, at least annually, a report by the independent auditors describing:
•
the firm’s internal quality-control procedures; and
•
any material issues raised by the most recent internal quality-control review, or peer review,
of the auditing firm or by any inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or more independent audits carried
out by the firm, and any steps taken to deal with any such issues.
In addition, the Committee’s annual review of the independent auditors’ qualifications shall also
include the review and evaluation of the lead partner of the independent auditors for the Company’s
account, and evaluation of such other matters as the Committee may consider relevant to the
engagement of the auditors, including views of company management and internal finance
employees, and whether the lead partner or auditing firm itself should be rotated.
Annual Financial Reporting
As often and to the extent the Committee deems necessary or appropriate, but at least annually in
connection with the audit of each fiscal year’s financial statements, the Committee shall:
1.
Review and discuss with appropriate members of management the annual audited financial
statements, related accounting and auditing principles and practices, and (when required of
management under the applicable listing standards) management’s assessment of internal
control over financial reporting.
2.
Timely request and receive from the independent auditors the report required (along with any
required update thereto) pursuant to applicable listing standards prior to the filing of an audit
report, concerning:
•
all critical accounting policies and practices to be used;
•
all alternative treatments of financial information within generally accepted accounting
principles for policies and practices relating to material items that have been discussed
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with company management, including ramifications of the use of such alternative
disclosures and treatments and the treatment preferred by the independent auditors; and
•
other material written communications between the independent auditors and company
management, such as any management letter or schedule of unadjusted differences.
3.
Discuss with the independent auditors the matters required to be discussed by AICPA
Statement on Auditing Standards No. 61, including such matters as:
•
the quality and acceptability of the accounting principles applied in the financial
statements;
•
new or changed accounting policies, and significant estimates, judgments, uncertainties
or unusual transactions;
•
the selection, application and effects of critical accounting policies and estimates
applied by the Company;
•
issues raised by any “management” or “internal control” letter from the auditors,
problems or difficulties encountered in the audit (including any restrictions on the scope
of the work or on access to requested information) and management’s response to such
problems or difficulties, significant disagreements with management, or other
significant aspects of the audit; and
•
any off-balance sheet transactions, and relationships with any unconsolidated entities or
any other persons, which may have a material current or future effect on the financial
condition or results of the Company and are required to be reported under SEC rules.
4.
Review and discuss with appropriate members of management the Company’s intended
disclosures under “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” (or equivalent disclosures) to be included in the Company’s Annual
Report filed with the SEC and its equivalent filed with the OSC.
5.
Receive from the independent auditors a formal written statement of all relationships between
the auditors and the Company consistent with Independence Standards Board Standard No. 1.
6.
Actively discuss with the independent auditors any disclosed relationships or services that
may impact their objectivity and independence, and take any other appropriate action to
oversee their independence.
Quarterly Financial Reporting
The Committee’s quarterly review shall normally include:
1.
Review and discuss the quarterly financial statements of the Company and the results of the
independent auditors’ review of these financial statements with appropriate members of
management.
2.
Review and discuss with Company management and, if appropriate, the independent auditors,
significant matters relating to:
•
the quality and acceptability of the accounting principles applied in the financial
statements;
•
new or changed accounting policies, and significant estimates, judgments, uncertainties
or unusual transactions;
•
the selection, application and effects of critical accounting policies and estimates
applied by the Company; and
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•
any off-balance sheet transactions and relationships with any unconsolidated entities or
any other persons which may have a material current or future effect on the financial
condition or results of the Company and are required to be reported under SEC rules.
3.
Review and discuss with appropriate members of management the Company’s intended
disclosures under “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” (or equivalent disclosures) to be included in the Company’s quarterly
reports prepared in accordance with Canadian requirements and filed on Form 6-K with the
SEC and its equivalent filed with the OSC.
Other Functions
The Committee shall review and assess the adequacy of this charter annually, recommend any
proposed changes to the full Board and, to the extent required by the listing standards, certify
annually to any AMEX, TSX or other listing market that the Committee reviewed and assessed the
adequacy of the charter.
The Committee shall discuss with management earnings press releases (including the type and
presentation of information to be included, paying particular attention to any use of “pro forma” or
“adjusted” non-GAAP information), and financial information and earnings guidance provided to
analysts and rating agencies.
This may be conducted generally as to types of information and
presentations, and need not include advance review of each release or other information or guidance.
The Committee, to the extent it deems necessary or appropriate, shall periodically review with
management the Company’s disclosure controls and procedures, internal control over financial
reporting and systems and procedures to promote compliance with applicable laws.
The Committee shall periodically:
•
inquire of management and the independent auditors about the Company’s major
financial risks or exposures;
•
discuss the risks and exposures and assess the steps management has taken to monitor
and control the risks and exposures; and
•
discuss guidelines and policies with respect to risk assessment and risk management.
The Committee shall conduct any activities relating to the Company’s code(s) of conduct and ethics
as may be delegated, from time to time, to the Committee by the Board.
The Committee shall establish and maintain procedures for:
•
the receipt, retention, and treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters; and
•
the confidential, anonymous submission by employees of the Company of concerns
regarding questionable accounting or auditing matters.
If the Committee so determines, the confidential, anonymous submission procedures may also include
a method for interested parties to communicate directly with non-management directors.
It is the Company’s policy that the Company shall not enter into transactions required to be disclosed
under item 404 of the Securities and Exchange Commission’s Regulation S-K or other applicable
Canadian requirements unless the Committee first reviews and approves such transactions.
The Committee shall review and take appropriate action with respect to any reports to the Committee
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from internal or external legal counsel engaged by the Company concerning any material violation of
securities law or breach of fiduciary duty or similar violation by the Company, its subsidiaries or any
person acting on their behalf.
The Committee shall, from time to time as necessary, review the effect of regulatory and accounting
initiatives on the financial statements of the Company.
In addition, the Committee, as it considers
appropriate, may consider and review with the full Board, company management, internal or external
legal counsel, the independent auditors or any other appropriate person any other topics relating to the
purposes of the Committee which may come to the Committee’s attention.
The Committee may perform any other activities consistent with this charter, the Company’s
corporate governance documents and applicable listing standards, laws and regulations as the
Committee or the Board considers appropriate.
Meetings, Reports and Resources
The Committee shall meet as often as it determines is necessary, but not less than quarterly. The
Committee shall meet separately with management and independent auditors.
In addition, the
Committee may meet with any other persons, as it deems necessary.
The Committee may establish its own procedures, including the formation and delegation of authority
to subcommittees, in a manner not inconsistent with this charter, the by-laws or the listing standards.
The chairperson or a majority of the Committee members may call meetings of the Committee.
A
majority of the authorized number of Committee members shall constitute a quorum for the
transaction of Committee business, and the vote of a majority of the Committee members present at a
meeting at which a quorum is present shall be the act of the Committee, unless in either case a greater
number is required by this charter, the by-laws or the listing standards. The Committee shall keep
written minutes of its meetings and deliver copies of the minutes to the corporate secretary for
inclusion in the Company’s corporate records.
The Committee shall prepare any audit committee report required to be included in the Company’s
annual meeting proxy or information statement, and report to the Board on the other matters relating
to the Committee or its purposes, as required by the listing standards. The Committee shall also report
to the Board annually the overall results of its annual review of the independent auditors’
qualifications, performance and independence.
The Committee shall also report to the Board on the
major items covered by the Committee at each Committee meeting, and provide additional reports to
the Board as the Committee may determine to be appropriate, including review with the full Board of
any issues that arise from time to time with respect to the quality or integrity of the Company’s
financial statements, the Company’s compliance with legal or regulatory requirements, the
performance and independence of the independent auditors.
The Committee is at all times authorized to have direct, independent and confidential access to the
independent auditors and to the Company’s other directors, management and personnel to carry out
the Committee’s purposes.
The Committee is authorized to conduct or authorize investigations into
any matters relating to the purposes, duties or responsibilities of the Committee.
As the Committee deems necessary to carry out its duties, it is authorized to select, engage (including
approval of the fees and terms of engagement), oversee, terminate, and obtain advice and assistance
from outside legal, accounting, or other advisers or consultants.
The company shall provide for
appropriate funding, as determined by the Committee, for payment of:
•
compensation to the independent auditors for their audit and audit-related, review and
attest services;
•
compensation to any advisers engaged by the Committee; and
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•
ordinary administrative expenses of the Committee that are necessary or appropriate in
carrying out its duties.
Nothing in this charter is intended to preclude or impair the protection provided under corporation
law for good faith reliance by members of the Committee on reports or other information provided by
others.
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