Auditor Independence Policy

Transcription

1 Auditor Independence Policy JANUARY 2016

2 POLICY PURPOSE This Corporate Policy provides the guidelines for ensuring that the external auditors of Manitoba Telecom Services Inc. ( MTS or the Company ) remain independent in both fact and in appearance 1.0 Purpose and Applicability The Audit Committee of the Board of Directors of MTS is responsible for the establishment of this policy, which is intended to ensure that the external auditors remain independent both in fact and in appearance. Any changes to this policy require the approval of the Audit Committee Maintaining the independent and objective viewpoint of the independent external auditors is critical to the external financial reporting process and essential to the Company s access to the capital markets This policy is applicable in all cases where the Company s external auditor (the Audit Firm ) is to be engaged by the Company. For the purposes of this policy, the Audit Firm includes the firm appointed annually by the shareholders, as described in section 1.1.1, and all of its affiliates. An entity will be considered an affiliate of the Audit Firm in any case where it has an ownership interest in the Audit Firm, or where the Audit Firm has an ownership interest in it, either of which is equal to or greater than 20% For the purposes of this policy the Corporation refers to Manitoba Telecom Services Inc., and the Company refers to Manitoba Telecom Services Inc. and all of its subsidiaries. An entity will be considered a subsidiary in any case where the Company holds an ownership interest in such entity that is equal to or greater than 50%. 1.1 Audit Services The external auditors of the Company are appointed annually by vote of the shareholders at the Annual General Meeting of the Corporation, based on the recommendations of the Board of Directors and its Audit Committee, to perform audit services on the Company s annual financial statements The Audit Firm s compensation for such services is approved by the Board of Directors annually based on the recommendations of the Audit Committee. 1.2 Other Services Any services, other than the annual audit of the Company s annual financial statements, provided by the Audit Firm must be pre-approved by the Audit Committee. AUDITOR INDEPENDENCE POLICY PAGE 1 JANUARY 2016

3 1.2.2 The Audit Firm s compensation for such services also must be pre-approved by the Audit Committee. 1.3 Permitted Services Certain classes of services, hereinafter called permitted services, which may be undertaken by the Audit Firm subject to the pre-approval of the Audit Committee, include, but are not limited to, the following: - Audits of the Company s financial statements required by lenders, statutory requirements, regulators, and others. - Consents, comfort letters, reviews of registration statements and similar services that incorporate or include the audited financial statements of the Company. - Employee benefit plan audits. - Accounting consultations and support related to generally accepted accounting principles. - Tax compliance and related support for any tax returns filed by the Company, and returns filed by any executive or expatriate under a company-sponsored program. - Tax planning and support. - Merger and acquisition due diligence services All services that are not prohibited services, as described in section 1.4, shall be deemed permitted services and may be provided to the Company with the preapproval of the Audit Committee, as described in sections and The Audit Committee may delegate to one or more designated members(s) of the Audit Committee (a Designated Member ), the authority to grant pre-approvals of permitted services (defined above), or classes of permitted services, to be provided by the Audit Firm. The decisions of a Designated Member to pre-approve a permitted service shall be reported to the Audit Committee at each of its regularly scheduled meetings In addition, the Audit Firm will confirm each quarter, in writing, the Audit Firm s independence, in all material matters, to the Audit Committee. This report shall include disclosure of all fees paid to the Audit Firm by the Company. 1.4 Prohibited Services The Company may not engage the Audit Firm to provide the non-audit services described below to the Company. - Bookkeeping or Other Services Related to the Company s Accounting Records or Financial Statements AUDITOR INDEPENDENCE POLICY PAGE 2 JANUARY 2016

4 The Audit Firm cannot maintain or prepare the Company s accounting records or prepare the Company s financial statements that are either filed with the OSC or form the basis of financial statements filed with the OSC. - Appraisal or Valuation Services Fairness Opinions The Audit Firm cannot provide appraisal or valuation services when it is reasonably likely that the results of any valuation or appraisal would be material to the Company s financial statements, or where the Audit Firm would audit the results. - Actuarial Services The Audit Firm cannot provide insurance actuarial-oriented advisory services unless the Company uses its own actuaries or third party actuaries to provide management with the primary actuarial capabilities, and management accepts responsibility for actuarial methods and assumptions. - Management Functions or Human Resources Partners and employees of the Audit Firm cannot act as a director, officer, or employee of the Company, or perform any decision-making, supervisory, or ongoing monitoring function for the Company. The Audit Firm cannot recruit, act as a negotiator on the Company s behalf, deliver employee testing or evaluation programs, or recommend, or advise that the Company hire, a specific candidate for a specific job. - Broker-Dealer, Investment Adviser, or Investment Banking Services The Audit Firm cannot serve as a broker-dealer, promoter or underwriter of audit client s securities. - Legal Services and Expert Services Unrelated to the Audit The Audit Firm cannot provide any service in which the person providing the service must be admitted to practice before the courts of a Canadian jurisdiction. - Internal Audit Outsourcing The Audit Firm cannot provide any internal audit services relating to accounting controls, financial systems, or financial statements. - Financial Information Systems Design and Implementation The Audit Firm cannot design or implement a hardware or software system that aggregates source data underlying the financial statements or generates information that is significant to the Company s financial statements, taken as a whole. 1.5 Audit Committee review of services At each Audit Committee meeting that has been scheduled to approve the Company s quarterly financial statements, management shall provide the following: AUDITOR INDEPENDENCE POLICY PAGE 3 JANUARY 2016

5 - a report summarizing the services, or grouping of related services, including fees, provided by the Audit Firm - a listing of newly pre-approved services since its last regularly scheduled meeting - an updated projection for the current fiscal year, of the estimated annual fees to be paid to the Audit Firm 1.6 Audit Committee review of hiring The Audit Committee must pre-approve the hiring of any current or former partners or employees of the Audit Firm by the Company. 1.7 Effective Date This policy shall be effective immediately upon approval by the Audit Committee. AUDITOR INDEPENDENCE POLICY PAGE 4 JANUARY 2016