The primary function of the Audit Committee of Alfa-Bank is to assist the Board of Directors in overseeing internal audit processes, reviewing financial reports, monitoring quality assurance of corporate governance, and maintaining effective corporate control.
The Audit Committee of Alfa-Bank reports to the Board of Directors and consists of the following members:
- Ildar Karimov — Member of the Board of Directors of Alfa-Bank
- David Gould — Deputy Director for Corporate Development, Finance and Control of Alfa Group Consortium
The duties of the Audit Committee include the following elements:
- The Audit Committee is obliged to oversee the internal audit process, with the following duties:
- Approving appointment and dismissal of the Head of Internal Audit
- Reviewing activities, organisational structure, and qualifications of the Internal Audit
- Assuring that Internal Audit is adequately staffed and financed
- Reviewing and approving the Internal Audit charter on a periodic basis
- Reviewing and approving the Internal Audit work plan
- Requesting Internal Audit to perform special investigations if required
- The Audit Committee’s principal activities in the area of financial reporting are:
- Recommending external auditors to the Board of Directors
- Overseeing external audit coverage including engagement letters, fees, timing, reviewing audit performance, non-audit services, auditors’ independence, et cetera.
- Reviewing accounting policy and policy decisions based mainly on reviews and analyses made by external and internal auditors
- Reviewing the financial statements including interim and annual financial statements, auditors’ opinions and management letters
- Reviewing the integrity of the organisation’s financial reporting, processes (internal and external, in consultation with the independent auditors)
- Considering the independent auditors’ judgments about common accounting principles
- Discussing with management and independent auditors all findings that independent auditors would include in their report, including internal control recommendations
- Consulting with the independent auditors in the absence of management about internal controls and the fullness and accuracy of the organisation’s financial statements
- Analysis of significant issues and changes in accounting and financial reporting standards to understand their impact on the financial statements
- Reviewing any significant disagreement among management and the independent auditors or the Internal Audit in connection with the preparation of the financial statement
- The Audit Committee engages in the following activities in order to guarantee the quality of corporate governance:
- Reviewing internal audit reports on corporate policy relating to compliance with law and regulations, ethics, conflict of interests, investigations of misconduct and fraud
- Reviewing current/pending litigation or regulatory proceedings with bearing on corporate governance
- Reviewing management’s monitoring of the compliance with the organisation’s Ethical Code
- Reviewing significant cases of employee conflict of interests, misconduct, or fraud
- Establishing regular and separate systems of reporting to the Committee by management, independent auditors and the Internal Audit
- Reviewing any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information
- Reviewing any legal matter that could have a significant impact on Alfa-Bank, its subsidiaries or related companies
- The Audit Committee is responsible for reviewing the key financial and operational risk areas and systems of internal controls, including:
- Reviewing internal audit reports
- Evaluating the effectiveness of internal control and risk management
- Reviewing and assessing management efforts to establish an adequate internal control environment
- Reviewing contingency plans and procedures
- Ensuring implementation of internal audit recommendations by management
- Ensuring implementation of independent auditors’ recommendations by management
- Considering the nature and extent of risks acceptable for the business and how these key risks are identified, evaluated and managed.
The Committee has the authority to conduct any investigation it deems necessary or appropriate in order to fulfil its duties. The Committee has unrestricted access to the independent public auditors, Internal Audit Department (“IAD”), and anyone else within the Group, and may require any officer or employee or independent auditors to attend a meeting of the Committee or to meet with any members of, or consultants or advisors to the Committee.
The Committee reports to the Board not less than once per year.