Audit Committee Charter

The committee revised the Audit Committee Charter in 2004/5. The changes broadened the committee's purpose to include corporate governance and risk management, not just accounting and internal controls. This charter governs the operations of the Audit Committee and details the requirements for membership. The committee's duties and responsibilities are also explained. The committee will review and reassess the charter at least annually and obtain the approval of the board.

The charter requires that the committee evaluate its performance at least annually to ensure it is functioning effectively in line with current best practice. The committee undertook its first such assessment in 2003. The results from the evaluation have been collated into an action plan which is progressively being implemented.

Audit Committee Charter

Organisation

This charter governs the operations of the audit committee. The committee will review and reassess the charter at least annually and obtain the approval of the board of directors.

Purpose

The audit committee will provide assistance to the board of directors in fulfilling its corporate governance and oversight responsibilities in relation to Tourism Queensland's financial reporting, internal control structure, risk management systems, and the internal and external audit functions. In addition, the Audit Committee will:

• Review, update and approve internal audit and external audit plans;
• Review internal and external report findings, recommendations and management responses;
• Track management implementation of agreed internal and external audit recommendations;
• Monitor the progress of outstanding issues on the audit register;
• Review and approve the annual financial report; and
• Review the risk register.

Furthermore, the committee will meet in private session at least annually to assess management's effectiveness in the areas of responsibility of the Audit Committee.

In doing so, it is the responsibility of the committee to maintain free and open communication between the committee, external auditors, internal auditors and management of Tourism Queensland. In discharging its oversight role, the committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of Tourism Queensland. It has the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties, provided it keeps the Board advised as to the nature and extent of such outside advice.

Responsibilities

The audit committee’s four main responsibilities are to:

• Assess and contribute to the audit processes in relation to the identification of risks and threats to Tourism Queensland, taking into account the environment, financial and other factors in which Tourism Queensland operates and its performance management framework;
• Assess and enhance Tourism Queensland’s corporate governance, including its systems of internal control, risk management and internal audit activities;
• Evaluate the quality and facilitate the practical discharge of the internal audit function, particularly in the areas of planning, monitoring and reporting; and
• Through the internal audit function, oversee and appraise Tourism Queensland’s financial and operational reporting.

Appointment of the internal auditors

The committee will be directly responsible for making recommendations to the board of directors on the appointment, reappointment or replacement, remuneration, monitoring of the effectiveness, and independence of the internal auditors.

Independence of the internal and external auditors

The Committee will review and assess the independence of the internal and external auditors, including but not limited to any relationships with Tourism Queensland or any other entity that may impair or appear to impair the internal auditor's judgment or independence in respect of Tourism Queensland.

Scope of the internal audit

The committee will discuss with the internal auditors the overall scope of the internal audit, including identified risk areas and any additional agreed-upon procedures. The committee will also consult with the internal auditors regarding the plan of audit and the coordination of activities with the external audit function.

Assessment of the internal audit

The audit committee will act as a forum for internal audit and oversee its planning, monitoring and reporting processes. This will form part of the governance processes that ensure that the internal audit function operates effectively, efficiently and economically. The Committee will review internal audit's mission, charter and resources and discuss the scope of the internal audit with the internal auditor, including the internal audit plan, work program and quality control procedures.

Communications with stakeholders

The committee will review all representation letters signed by Tourism Queensland management to ensure that the information provided is complete and appropriate. Also, the committee will discuss the results of the annual audit and any other matters required to be communicated to the committee by the external auditors under generally accepted auditing standards. The committee will establish procedures for the receipt, retention, and treatment of complaints received by Tourism Queensland regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

Committee performance

The committee will perform an evaluation of its performance at least annually to determine whether it is functioning effectively by reference to current best practice.

Relationship with external audit

The Queensland Auditor General holds statutory appointment as auditor of Tourism Queensland and is responsible for reporting independently to Parliament on the discharge of those statutory obligations. The audit committee has no power of direction over external audit or the manner in which external audit is planned or undertaken. The committee will act as a forum for the consideration of external audit’s findings and will ensure that they are balanced with the views of management. External audit will consult with the audit committee on its proposed audit strategy and audit fees for each year. The committee will ensure that an integrated audit process occurs.

Duties

The committee, in carrying out its responsibilities, believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The committee will take appropriate actions to set the overall corporate 'tone' for quality financial reporting, sound business risk practices and ethical behaviour. The following will be the principal duties and responsibilities of the audit committee. These are set forth as a guide with the understanding that the committee may supplement them as appropriate.

Understanding the business

The committee will ensure it understands Tourism Queensland's structure, controls and types of transactions in order to adequately assess the significant risks it faces in the current environment.

Financial reporting

The primary duty of the audit committee is to oversee Tourism Queensland's financial reporting process on behalf of the board and report the results of its activities to the board. Whilst the audit committee has the responsibilities and powers set forth in this Charter, it is not the duty of the audit committee to plan or conduct audits. The board of directors is responsible for Tourism Queensland's financial reports including the appropriateness of the accounting policies and principles that it uses. The external auditors are responsible for auditing Tourism Queensland's financial reports.

Assessment of accounting, financial and internal controls

The committee will discuss with management, the internal auditors and the external auditors, the adequacy and effectiveness of the accounting and financial controls, including the policies and procedures to assess, monitor, and manage business risk, and legal and ethical compliance programs (including the Code of Conduct). Any opinion obtained from the internal or external auditors on the choice of accounting policies or methods should include an opinion on the appropriateness and not just the acceptability of that choice or method.

The committee will meet periodically with management, the internal auditors and the external auditors to discuss issues and concerns warranting committee attention, including but not limited to their assessments of the effectiveness of internal controls and the process for improvement. The committee will provide sufficient opportunity for the internal auditors and the external auditors to meet privately with the members of the committee. The committee will review with the external auditor any audit problems or difficulties and management's response.

The committee will receive regular reports from the external auditor on the critical policies and practices of Tourism Queensland, and all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management.

Membership

The Committee will include three voting members, independent of management and Tourism Queensland. At least one voting member should have leadership experience and a strong finance, accounting and/or business background. Two of the voting members will be members of, and appointed by, the board of directors. The third voting member will be an external independent member, as nominated by the Director-General of the Department of Tourism, Fair Trading and Wine Industry Development. Although nominated by the Department, the external independent member’s role on the Audit Committee is to represent the best interests of Tourism Queensland. All committee members will be financially literate, or become financially literate within a reasonable period of time after appointment.

The Chairman of the Committee must be a member of the board of directors. The other member of the board of directors will be the deputy Chairman and will understudy the Chairman. Upon the end of the Chairman’s term, the deputy will be ready to transition into the role. This succession plan requires that board members’ terms be considered when they are appointed to the Audit Committee to ensure that both are not due to change at the same time.

Members of the committee will be considered independent so long as they do not have any relationship with Tourism Queensland that may interfere with the exercise of independent judgment. This means they will not accept any consulting, advisory, or other compensatory fee from Tourism Queensland and are not an affiliated person of Tourism Queensland or its related entities. The only compensation will be directors' fees for services provided to the audit committee. Representatives from internal or external audit are invited to attend committee meetings and provide technical and other advice to the committee.

A quorum for a meeting of the Committee will be two voting members. All motions of the Committee will be decided by a simple majority vote. In the case of an equality of votes, then the chairperson will have the casting vote.

The Committee will also comprise the following representatives in an "observer" and non-voting capacity:

Chief Executive Officer - Tourism Queensland
Executive Director Corporate Services - Tourism Queensland
Director Finance - Tourism Queensland
Designated Representative - Internal Audit
Designated Representative - Queensland Audit Office

Meetings

The committee will meet at least four times each year.

Reporting

The Committee will report to the Board regularly with respect to its activities and its recommendations. When presenting any recommendation or advice to the Board, the Committee will provide such background and supporting information as may be necessary for the Board to make an informed decision.
The Committee will keep minutes of its meetings and will make such minutes available to the full Board for its review.