BOC Hong Kong (Holdings) Limited and its subsidiary, Bank of China (Hong Kong) Limited, have issued a comprehensive mandates document for the Audit Committee, emphasizing the committee’s oversight of financial statements, risk management, and corporate governance policies across the group. The document highlights the Audit Committee’s expanded responsibilities in ensuring transparency in financial disclosures and upholding best practices in compliance.
The new mandate outlines the committee’s role in reviewing annual and half-yearly financial statements, examining complex transactions, assessing significant accounting risks, and recommending any necessary adjustments. The guidance further stresses the importance of evaluating major areas of judgment that could materially affect the group’s financial reporting and addressing any significant or unusual items disclosed by management.
Another key area involves risk management and internal control. The document clarifies that management bears responsibility for establishing robust systems, while the Audit Committee regularly reviews their effectiveness. Areas of focus include assessing resource adequacy for compliance and accounting functions, monitoring whistleblowing arrangements, and reviewing relevant reports from regulators.
The mandate reinforces requirements for reviewing the internal audit function. The Audit Committee holds authority to approve audit strategies, recommend the appointment and termination of senior internal audit personnel, and examine the scope and budget for the internal audit team. Regular separate meetings between the committee and internal auditors are mandated to maintain independence and thorough oversight.
On external audit matters, the document emphasizes the committee’s principles for reviewing audit scope, monitoring auditor independence, and determining recommendations for the appointment and remuneration of the external auditor. The group underlines ensuring non-audit services do not threaten objectivity and affirms the need for open communication with auditors on any identified weaknesses or potential accounting issues.
The revised mandate also addresses corporate governance, requiring ongoing review of the committee’s own effectiveness and alignment with the overarching governance framework. The document mandates at least four meetings per year, timed to match the financial reporting cycle, along with the flexibility to convene additional sessions as needed. This structure aims to strengthen the overall accountability framework of the group’s Audit Committee responsibilities.