GOLDEN GOLIATH RESOURCES LTD.
The primary function of the audit committee (the “Committee”) is to assist the board of directors in fulfilling its financial oversight responsibilities. The Committee reviews the financial reports and other financial information provided by the Company to regulatory authorities and its shareholders and reviews the Company’s systems of internal controls regarding finance and accounting including our auditing, accounting and financial reporting processes. The Committee’s primary duties and responsibilities are to:
1. Serve as an independent and objective party to monitor the Company’s financial reporting and internal control system and review the Company’s financial statements.
2. Review and appraise the performance of the Company’s external auditors.
3. Provide an open avenue of communication among the Company’s auditors, financial and senior management and the Board of Directors.
The Committee is comprised of three directors as determined by the Board of Directors. At least one member of the Committee should have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Audit Committee Charter, the definition of “financially literate” is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company’s financial statements.
The members of the Committee are elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.
Qualifications and Experience
Each audit committee member has gained financial literacy through their years of experience serving as directors or officers of other companies. In these positions, each member would be responsible for receiving financial information relating to their company and obtaining an understanding of the balance sheet, income statement and statement of cash flows and how these statements are integral in assessing the financial position of the company and its operating results. Each member has a good understanding of the junior mining business which the Company engages in and has an appreciation for the relevant accounting principles for that business.
Member Appointment and Removal
1. the Audit Committee members are appointed by the Board and with consideration of the desires of individual Board members;
2. consideration will be given to rotating the Audit Committee members periodically;
3. the Audit Committee Chairman is selected by the Board; and
4. the Board may at any time remove a member from the Audit Committee.
Mandate and Responsibilities
To fulfill its responsibilities and duties, the Committee shall:
(a) Review and update the Charter annually.
(b) Review the Company’s financial statements, MD&A and any annual and interim earnings, press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.
(a) Review annually, the performance of the external auditors who shall be ultimately accountable the Board of Directors and the Committee as representatives of the shareholders of the Company.
(b) Recommend to the Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval.
(c) Review with management and the external auditors the audit plan for the year‑end financial statements and intended template for such statements.
(d) Review and pre‑approve all audit and audit‑related services and the fees and other compensation related thereto, and any non‑audit services, provided by the Company’s external auditors.
Provided pre‑approval of the non‑audit services is presented to the Committee’s first scheduled meeting following such approval, such authority may be delegated by the Committee to one or more independent members of the Committee.
Financial Reporting Processes
(a) In consultation with the external auditors, review with management the integrity of the Company’s financial reporting process, both internal and external.
(b) Consider the external auditors’ judgments about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting.
(c) Consider and approve, if appropriate, changes to the Company’s auditing and account principles and practices as suggested by the external auditors and management.
(d) Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.
(e) Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements.
(f) Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented.
(g) Review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters.
(h) Review certification process.
(i) Establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
(a) Review any related‑party transaction.
The Audit Committee shall have the authority:
1. for the purpose of performing its duties, to inspect all of the books and records of the Company and its affiliates and to discuss such accounts and records and any matters relating to the financial position or condition of the Company with the officers and internal (if any) and external auditors of the Company and its affiliates;
2. to engage independent counsel and other advisors as it determines necessary to carry out its duties;
3. to set and pay the compensation for any advisors employed by the Audit Committee, including without limitation compensation to any public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;
4. to set and pay the ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties; and
5. to communicate directly with the internal (if any) and external auditors.