Breton Technology Co., Ltd. recently promulgated its new Terms of Reference for the Audit Committee of the Board of Directors. According to the document, the committee consists solely of non-executive directors, with a majority being independent non-executive directors who possess no relationships affecting objective judgment. At least one of these independent directors is required to have accounting or financial management expertise.

The Terms of Reference clarify that the committee oversees communication, supervision, and verification of internal controls, risk management, financial reporting, and internal auditing. It is also tasked with managing the relationship with external auditors. In particular, the committee is responsible for reviewing the annual internal audit plan, assessing the company’s financial statements, and monitoring the results of both internal and external audits.

The document highlights the committee’s authority to make recommendations on the appointment, reappointment, or removal of external auditors. Additionally, the committee evaluates the auditors’ independence and reviews significant judgments in the company’s financial statements, including adjustments and changes in accounting policies. It also focuses on ensuring effective coordination between internal and external audit work.

The committee meets regularly to fulfill its obligations, with at least two meetings per year. If necessary, additional interim meetings may be called. Each meeting emphasizes evaluating financial controls, reviewing risk management measures, and verifying that the financial reporting function is conducted objectively. The Terms of Reference also describe procedures for convening meetings, handling conflicts, and keeping meeting records confidential.

Breton Technology Co., Ltd. underlines the importance of proper resources for the committee’s operations. The company is required to provide dedicated personnel or an office for the committee’s day-to-day activities, ensuring it can carry out its responsibilities effectively. Should the committee encounter any unusual circumstances or major concerns, it may initiate independent investigations or even engage third-party experts for further analysis.