Audit Committee Mandate

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---
schema: foundry-doc-v1
title: "Audit Committee Mandate"
slug: audit-committee-mandate
category: governance
type: topic
content_type: topic
quality: complete
short_description: "The composition, independence requirements, and responsibilities of the audit committee under NI 52-110 Audit Committees, including oversight of financial reporting, external auditor relationships, and internal controls."
status: active
bcsc_class: public-disclosure-safe
language_protocol: PROSE-TOPIC
last_edited: 2026-06-29
editor: woodfine-editorial
paired_with: audit-committee-mandate.es.md
---

National Instrument 52-110 Audit Committees establishes mandatory requirements for the audit
committees of reporting issuers. The audit committee is a standing committee of the board
of directors responsible for oversight of financial reporting integrity, external auditor
independence, and internal control adequacy. Its mandate is to provide independent
oversight of management's financial reporting responsibilities on behalf of investors.

## Composition and independence

NI 52-110 requires that the audit committee consist entirely of independent directors.
A director is independent if the director has no direct or indirect material relationship
with the issuer — a relationship that could, in the view of the board, reasonably interfere
with the exercise of the director's independent judgement.

The following relationships create a per se non-independence finding: current employment
by the issuer, participation in an equity compensation plan, acceptance of compensation from
the issuer other than board remuneration, and family relationships with officers of the
issuer.

All audit committee members must also be financially literate — able to read and understand
a set of financial statements that present a breadth and level of complexity of accounting
issues reasonably comparable to those of the issuer's financial statements. At least one
member must have accounting or related financial expertise.

For venture issuers and other smaller reporting issuers, NI 52-110 provides certain
exemptions from the full independence and composition requirements. These exemptions do not
relieve the issuer of the obligation to have a functioning audit committee with oversight
responsibilities.

## Core responsibilities

**Financial statement oversight.** The audit committee reviews the annual and interim
financial statements before they are approved by the board and filed on SEDAR+. The
review includes examination of significant accounting policies and estimates, areas of
management judgement, and any identified material weaknesses or significant deficiencies.

**External auditor oversight.** The audit committee is directly responsible for the
appointment, compensation, and oversight of the external auditor. This responsibility
includes review of the auditor's independence, review and pre-approval of all audit and
permitted non-audit services, and review of the auditor's report and any management letters.

**Internal controls.** The audit committee oversees management's processes for maintaining
adequate internal controls over financial reporting. This includes review of management's
assessment of internal control adequacy and discussion with management and the external
auditor of any significant control deficiencies.

**Whistleblower procedures.** The audit committee must establish procedures for the receipt,
retention, and treatment of complaints regarding accounting, internal accounting controls,
or auditing matters, including procedures for the confidential, anonymous submission of
concerns by employees.

## Audit committee information circular disclosure

Reporting issuers are required to disclose in their management information circular or
AIF the names and financial literacy of audit committee members, the charter of the audit
committee (often attached as an exhibit), and any services pre-approved by the committee.
Disclosure of audit and non-audit fees paid to the external auditor is required annually.

## See also

- [[board-governance-structure]] — the broader board governance framework
- [[continuous-disclosure-obligations]] — the financial reporting obligations the audit
  committee oversees