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Audit Committee

Mandate

The Audit Committee provides assistance to the Board of Directors in fulfilling its oversight responsibility to the shareholders with respect to Finning’s:

  • ethical business conduct;
  • financial statements and related management discussion and analysis and earnings press releases;
  • financial reporting processes;
  • systems of internal and disclosure controls;
  • internal audit function;
  • external audit function;
  • financial arrangements and liquidity;
  • risk management process; and
  • pension plans.

It is the responsibility of the Committee to maintain an open avenue of communication between itself, the external auditors, the internal auditors and management of Finning. In performing its role, the Committee is empowered to investigate any matter brought to its attention, with full access to all books, records, facilities and personnel of Finning. It is also empowered to retain outside counsel or other experts as required.

 

Committee Membership

Name Independent
Stuart L. Levenick, Chair Yes
Vicki L. Avril, Financial Expert    Yes
Marcelo A. Awad Yes
Kevin A. Neveu Yes
Kathleen M. O'Neill, Financial Expert Yes
Christopher W. Patterson Yes

The Board Chair also regularly attends meetings of the Audit Committee. All Committee members must be independent and financially literate, meaning that each member can read and understand financial statements that are comparable to Finning’s in terms of breadth and complexity of accounting issues. At least one member is required to have accounting or related financial management expertise. K.M. O’Neill, the current Chair of the Audit Committee and Vicki L. Avril are the Committee’s designated “financial experts”.

Meetings

The Committee met five times in 2016, with 100% attendance at four meetings and 80% attendance at one meeting. In addition, at each Committee meeting the members held sessions without management present.

External Auditor

Deloitte LLP (Deloitte) has been Finning’s external auditor since 2002. The Audit Committee has the oversight responsibility for reviewing Deloitte’s performance, qualifications, independence and audit of Finning’s financial statements.

Services provided by, and fees paid to, the external auditor are explained in more detail in the 2017 Management Proxy Circular.

Pre-approval Policies and Procedures

The Audit Committee has adopted a formal policy requiring the pre-approval of services to be provided by Deloitte, prior to the commencement of the engagement. Between regularly scheduled Audit Committee meetings, the Committee has delegated to the Chair of the Audit Committee the authority to approve individual service engagements up to a value of $100,000 that have not been pre-approved. Under no circumstances will Finning’s management engage the external auditors to perform services that have not been approved by the Audit Committee. Management and the external auditor are required to report quarterly to the Audit Committee on all services provided by the external auditor and fees paid or accrued each quarter.

Risk Management

Finning has adopted a risk management approach to identifying and evaluating risks in order to protect and enhance shareholder value. On a quarterly basis, the Audit Committee reviews Finning’s process with respect to risk assessment and management of key risks, including Finning’s major financial risks and exposures and the steps taken to monitor and control such exposures. The risk management process involves the identification, by each of Finning’s significant operations, of key risks that could impact the achievement of Finning’s strategic plan. Each of these key risks and related mitigation or action plans are monitored closely and disclosed annually in Finning’s Annual Information Form and MD&A. Any changes to the key risks are reviewed by the Audit Committee and are disclosed on a quarterly basis in Finning’s interim financial filings.

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