Board Audit Committee Charter

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Table of Content

1. Introduction............................................................................................3

2. Purpose................................................................................................3

3. Duties and Responsibilities....................................................................3

4. Authority ................................................................................................5

5. Size, make-up and competencies of committee members .................. 5

6. Secretary of Meeting………………………………………………………...6

7. Chairperson eligibility and terms of appointment ….....………………. .6

8. Remuneration for members of the committee. ..................................... .6

9. Frequency of meetings. .........................................................................6

10. Attendance at Committee meetings……………………………………….7

11. Notice of meetings. .................................................................................6

12. Quorum at meetings. ..............................................................................7

13. Record keeping at meetings..................................................................7

14. Appointment of sub-committees............................................................7

15. Ability to take outside advice. ............................................................... .7

16. Reporting and accountability. ............................................................... .7

17. Chief Audit Executive………………………………………………………..8

18. Other Issues ...........................................................................................8

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1. Introduction
This Charter governs the operations of Access Bank Plc’s Board Audit
Committee (‘the Committee’). The Committee shall review and re-assess this
Charter every three years or such other period as the circumstance may warrant
and recommend required changes to the Board.

2. Purpose
The Committee assists the Board in fulfilling its oversight responsibility relating to:
a) The integrity of the Bank’s financial statements and the financial reporting process;
b) The independence and performance of the Bank’s internal and external auditors;
and
c) The Bank’s system of internal control and mechanism for receiving complaints
regarding the Bank’s accounting and operating procedures.

3. Duties and Responsibilities

The Committee will perform the following responsibilities as it relates to:

3.1 Internal Audit

a) Monitor the Bank’s internal audit function including its independence;
b) Oversee the development of a procedure for the Bank’s receipt, retention and
treatment of complaints regarding risk management, accounting, internal controls,
unethical activity, breach of corporate governance codes or audit matters, including
the means for the Bank’s stakeholders to submit such complaints in a confidential
and anonymous manner;
c) Investigate any matter brought to its attention within the scope of its duties with the
authority to retain counsel or other advisors, if in its judgment that is appropriate, at
the Bank’s expense;
d) Review and reassess its responsibilities, functions, pre-approval policy for audit and
non-audit services, making changes as necessary and conduct an annual
performance evaluation of its activities;
e) Ensure that the Bank provides adequate funding, as determined by the Committee,
to the Committee for payment, compensation to any advisers engaged by the
Committee, and payment of ordinary administrative expenses incurred by the
Committee in carrying out its duties; and
f) Review the proposed audit plan(s) and review the results of internal audits
completed since the previous Committee meeting as well as the focus of upcoming
internal audit projects.

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 g) Review and ensure that adequate whistle-blowing policies and procedures are in
place and that the issues reported through the whistle blowing mechanism are
summarized and presented to the Board
h) Ensure that the Internal Audit function is sufficiently skilled and resourced to address
the complexity and volume of risk faced by the Bank.

3.2 Statutory Audit and Financial Reporting

a) Review the results of the annual and interim audit and discuss the audited financial
statements with management;
b) Review the statutory auditors’ management letter when presented and ensure
adequacy of management’s response;
c) Review with the Chief Financial Officer annually the significant financial reporting
issues and practices of the Bank, and ensure that appropriate accounting principles
are applied including financial controls relating to the “closing of the books” process;
d) Meet separately as the need may arise with the Chief Financial Officer, Chief Audit
Executive and statutory auditor to discuss the adequacy and effectiveness of the
Bank’s accounting and financial controls;
e) Discuss the Bank’s policy regarding press releases as well as financial information
provided to analysts and rating agencies;
f) Review the Bank’s legal representation letter presented to the statutory auditors and
discuss significant items, if any,
g) Receive the decisions of the Shareholders Audit Committee on the statutory audit
report from the Company Secretary and ensure its full implementation;
h) Require management to present and discuss, as soon as practicable, all reports
received from regulators (e.g. CBN, SEC, NSE, NDIC and Rating Agencies etc.)
which may have a material effect on the financial statements or related compliance
policies;
i) Annually assess and confirm the independence and competence of the statutory
auditor, in line with the Bank’s Statutory Audit Independence Policy (see Appendix
A). The report of this assessment should be submitted to the Board;
j) On an ongoing basis review and ensure compliance with the list of non-audit
services that may be provided by the statutory auditors (see Appendix B).
k) Review legal and regulatory matters, contingent liabilities or other sensitive
information that may have a material effect on the Bank’s financial statements,
systems of internal control or regulatory compliance.
l) Preserve auditor’s independence by setting clear hiring policies for employees or
former employees of external auditors.

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 m) Develop a policy on the nature, extent and terms under which the external auditor
may perform non-audit service

3.3. The Committee shall recommend appointment, re-appointment or removal of the

Bank’s external auditors to the Board of Directors.

4. Authority
The Committee has the authority of the Board to:
a) Investigate any activity within its terms of reference;
b) Seek any information that it requires from any employee of the Bank and all
employees are directed to cooperate with any request made by the Committee;
c) have unlimited access to the Bank’s financial records including external auditors’
reports.
d) Form and delegate authority to sub-committees, made up of one or more members
of the Committee, as necessary or appropriate. The sub-committee will have the full
power and authority of the Committee.

5. Size, Make-Up and Competencies of Committee Members

The Committee shall be made up of at least four Non–Executive Directors nominated by the
Board of Directors, at least one of whom shall be an Independent Director who shall chair
the Committee. The Board shall consider the independence, financial literacy,
accounting or related financial management expertise, entrepreneurial skills, ethical
standards and other qualifications before nominating and appointing the members
of the Committee.

The Committee must have one member who is a financial expert. A financial expert
is someone who:
a) as a result of acting as an auditor or due to other relevant experience has
appropriate knowledge of both International Standards on Auditing, financial
reporting procedures and internal controls along with audit committee
functions; and
b) is a member of a reputable and relevant professional institution.
The appointment and removal of Committee members shall be the responsibility of
the Board.

Attending each meeting by standing invitation are the Chief Risk Officer, Chief
Financial Officer, Chief Conduct and Compliance Officer, Group Head, Corporate
Counsel and Chief Audit Executive, Head Group Human Resources while the Group

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 Managing Director, Group Deputy Managing Director and Executive Directors shall
attend based on specific invitation. The Chairperson of the Committee shall be
entitled to request that the Committee meet without any of these persons.

At least once a year, the Committee should hold a discussion with the Chief Audit
Executive and External Auditors independent of Management.

6. Secretary
The Company Secretary shall act as the secretary to the Committee.

7. Chairman’s eligibility and terms of appointment

The Chairman of the Committee shall be appointed from the members of the
Committee, for a period of three years. The Chairman of the Committee must be an
Independent Non-Executive Director appointed by the Board, for a period of three
years. The Chairman may be reappointed for a further period of three years. The
Chairman shall not be eligible for further re-appointment as Chairman until after
three years. The Chairperson shall be a person other than the Chairpersons of the
Board of Directors and the Board Credit and Finance Committee.

Where the Chairman is absent from a meeting, the Independent Non-Executive

Director previously designated by the Board as the Committee’s Vice-Chairman
shall preside over the meeting.

8. Remuneration of members of the Committee

The members remuneration shall be limited to Directors’ fees, sitting allowance and
reimbursable travel and hotel expenses. The Non-Executive Directors shall not
receive benefits and salaries whether in cash or in kind other than those mentioned
above.

9. Meetings
The Committee shall meet at least once every quarter or upon request of the
Chairperson of the Committee or any two members of the Committee.

The quarterly meeting shall be held in January, April, July, and October of every year
or such other months as exigencies of the Bank’s operations may permit.

The decision of the majority at any such meeting will be the decision of the
Committee. The Committee may also act by unanimous written resolution in lieu of a
meeting.

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10. Attendance at Committee Meetings
All Committee members are required to attend all meetings of the Committee.

11. Notice of meetings

The secretary shall provide notice of meetings, but lack of notice shall not invalidate
the proceeding of any meeting at which a quorum was present.

12. Quorum at meetings

Three members of the Committee shall constitute a quorum.

13. Record keeping at meetings

The secretary shall keep minutes of the committee meetings. The minutes of the
committee meetings shall be presented for approval at the next meeting of the
Committee.

14. Appointment of sub-committee

The committee may appoint its own sub-committees and delegate any of its
responsibilities that do not require involvement of the committee, to a sub-
committee. The sub-committee may comprise of one or more members of the
Committee. Each sub-committee shall report its activities at the next practicable
meeting of the Committee.

15. Ability to take external advice

The Committee has the power to obtain advice and assistance from, and to retain at
the Bank’s expense, such independent or outside legal counsel, accounting or other
advisors and experts as it determines necessary or appropriate to carry out its
duties. The Committee shall have the sole authority to retain, replace and approve
fees and other retention terms for any consultant or advisors that it requires to assist
it in fulfilling its duties.

16. Reporting and accountability

The Committee shall report the proceedings and recommendations of each meeting
to the Board at the next practicable meeting of the Board.

The Board shall evaluate the performance of the Committee as part of the annual
Board evaluation exercise.

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17. Chief Audit Executive
The appointment and removal of the Chief Audit Executive shall be the
responsibility of the Board of Directors subject to CBN’s ratification. The CBN must
be notified of any change and reasons thereof, within fourteen (14) days of such
change. The Chief Audit Executive shall report directly to the Board Audit
Committee.
18. Other Issues
The Board may rely on information provided by the Committee and its members in
relation to matters within the Committee’s responsibility under the terms of this
Charter if it has evaluated the information and is not aware of any reasonable basis
upon which to question its accuracy.

Management is responsible for the preparation, presentation and integrity of the

financial statements. Management is responsible for implementing and maintaining
appropriate accounting and financial reporting principles and policies and internal
controls and procedures designed to assure compliance with accounting standards
and applicable laws and regulations. Internal audit is responsible for independent
reviews of the integrity of financial data and of the control framework and compliance
with policies and regulations.

The statutory auditors are responsible for planning and carrying out each audit and
review, in accordance with applicable auditing and review standards. The statutory
auditors are accountable to shareholders through the Shareholders Audit
Committee.

19. Approval and Effective Date

This Charter becomes effective immediately upon approval of the Central Bank of
Nigeria

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APPENDIX A
STATUTORY AUDIT INDEPENDENCE POLICY

Introduction

This policy is in furtherance of the Bank’s commitment to best corporate governance

practice, and assurance of independence of the statutory auditors. All amendments to
this policy must be approved by the Board of Directors.

Policy

1. Access Bank requires the statutory auditor to provide suitably qualified personnel to
ensure an effective audit. They should provide audit personnel who are appropriately
trained; capable of meeting the required technical standards; will always maintain
confidentiality and behave in a professional manner.

2. To ensure audit quality at Access Bank and to allow for an effective audit service by
suitably qualified professionals, Access Bank commits to the payment of fair
commercial rates for its statutory audit and audit-related services.

3. Access Bank considers that the level of non-audit fees paid to the statutory auditor
can give rise to a perception of a loss of objectivity. As an overriding principle Access
Bank will not allow fees paid to the statutory auditor for non-audit related services to
exceed, on an annual basis, a level that the Board is of the view that there is a risk
of a loss of objectivity by the statutory auditor.

4. The Board Audit Committee will annually review non-audit related services provided
by the statutory auditor during the previous year and proposed non-audit related
services for the coming year. The aim of the review is to seek assurance from
management and the statutory auditor to the ultimate satisfaction of the Committee,
that the non-audit services so provided, will not compromise the independence of
the statutory auditor. In addition, the Board Audit Committee has considered and
documented the non-audit services, (see Appendix B), the statutory auditor will be
permitted to provide to the Bank.

5. Access Bank will require the statutory auditor to commit to rotating the lead audit
partner for Access Bank every five (5) years.

6. Access Bank requires its statutory auditor to maintain quality control processes
whereby all key accounting and auditing decisions are arrived at after appropriate
consultation with technical and subject matter experts within the Firm.

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7. Access Bank requires its statutory auditor to maintain all audit related work papers
and reports for a minimum of seven (7) years

8. The Board Audit Committee will require the statutory auditor to confirm annually that
it has complied with all professional regulations relating to auditor independence.
Specifically, the statutory auditor will be required to confirm its commitment to strict
procedures to ensure that:
➢ The statutory auditor and its partners do not have any financial interest in Access
Bank;
➢ The engagement team members of the statutory auditor do not have any financial
interest in Access Bank;
➢ There are no business interests between Access Bank and the statutory auditor;
➢ The pension fund administrator of the partners and staff of the statutory auditor
does not hold any direct financial interest in Access Bank; and
➢ No portion of fees paid by Access Bank to the statutory auditor is made on a
contingency basis.

9. In addition, the Board Audit Committee will also require the statutory auditor to
annually submit a report which describes:
➢ Issues from the most recent internal quality review/peer review of the statutory
auditor;
➢ Issues from any inquiry or investigation by government or professional
authorities within the preceding five years, into any independent audits carried
out by the statutory auditor and the steps the statutory auditor has taken to deal
with such issues;
➢ All relationships between the statutory auditor and Access Bank; and
➢ The statutory auditor’s policy on audit partner rotation, which should include
confirmation that audit partners are subject to five-yearly rotation.

10. As a matter of principle and sound corporate governance, Access Bank will require
the statutory auditor to provide assurance on an annual basis that:
➢ The total fees received by the statutory auditor from Access Bank do not have
a material impact on its operations or financial conditions;
➢ Access Bank has not withheld fees from the statutory auditor; and

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 ➢ To the best of the statutory auditor’s knowledge, there is no litigation between
Access Bank and the statutory auditor.

11. In addition to the confirmations and representations by the statutory auditor referred
to above, the standard of independence to which the auditor complies will not be
less than the standards promulgated by the:
➢ Company and Allied Matters Act 1990;
➢ The Central Bank of Nigeria’s (CBN) Code of Corporate Governance;
➢ Institute of Chartered Accountants of Nigeria (ICAN); and
➢ The Securities and Exchange Commission (SEC).
➢ Financial Reporting Council of Nigeria

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Appendix B

LIST OF NON-AUDIT SERVICES THAT MAY BE PROVIDED BY THE STATUTORY

AUDITOR

AREA DESCRIPTION OF SERVICE

Assurance Accounting procedures review
Compliance assurance
General process and controls review
Corporate Governance
Prospectus/acquisition accounting due diligence

IT Reviews Review of IT process controls

Assessment of application controls
IT process risk reviews
Data conversion and integrity assurance
Interface control review
Quality assurance support
Security

Transaction services Transaction support for acquisition and divestment

Post merger integration advice
Transaction project management
Strategic financial advice, including strategic alliances

Risk Management Financial risk management (treasury review)

Fraud review
Probity audit
Benchmarking
Enterprise risk management reviews (part of year end review)

Technical Accounting Technical interpretation

International comparison

Taxation Tax planning and strategy

Company Income Tax and advisory
Stamp duty tax advisory
Indirect tax planning
Legislative monitoring and analysis
Capital structure planning
Tax and treasury harmonization
Tax due diligence
Tax merger integration advisory
Payroll employment tax advisory

Approved non-audit services iv

 Tax compliance services
Tax function improvement advisory
Tax audit risk assessment and advisory services

General Board and Directors review /appraisal

Junior accounting secondment (loan staff)

Approved non-audit services v