Audit and Risk Committee

Purpose
The purpose of the committee is to:

1. identify major areas of risk for IOP and its subsidiary companies and to ensure processes exist to manage risk in these areas;
2. ensure risk management and internal audit processes are administered effectively;
3. bring to the attention of the Council any areas of high risk and/or any anomalies brought to light through the audit process;
4. be available to ‘whistle blowers’ regarding risk areas or audit anomalies who are not satisfied with the outcomes of the normal management processes  in respect of the issues they have raised.

Authority
The committee is authorised by Council to:

1. investigate any activity within its terms of reference;
2. seek, and be provided with, any information it requires from any employee, officer or agent of the Institute of Physics and its subsidiary companies;
3. obtain outside legal or other professional advice and invite such advisors to meetings as necessary, within such budgets as Council may allocate.

Membership
Members of the committee are appointed by Council.  

The committee will have a minimum of 5 members, including the Chair. (The intention is that there will be 6 – 7 members consisting of the Chair, the IOPP NED, and 4 – 5 others from the current/recent Council members and external representative categories)

A quorum is 3 members with at least 2 current or former members of Council.

The term of office is 4 years, or the remaining length of their term on Council, whichever is the shorter, except as noted below. Members may be re-appointed for one further term.  

The current President, President-elect, Honorary Officers and Vice-Presidents may not be members of the committee.

• Chair, who should be a current Council member
• Up to 3 other current or recent Council members, at least 1 of whom being a current member
• A non-executive director (NED) of Institute of Physics Publishing Ltd. The term of office for this member will automatically cease if they cease to be an NED for IOPP Ltd.
• Up to 3 external members with relevant experience. Where this specialist expertise is in such areas as audit and risk management, it is not necessary for them to be members of the Institute of Physics.
  
  Meetings
  Frequency of meetings

1. The committee should meet at least three times per year, at appropriate dates to coincide with the financial reporting cycle.  
2. The external auditors and internal auditors should attend for part of one meeting without IOP management present.
3. Internal or external auditors can request a meeting if they consider that one is necessary.

Secretary
The Committee may appoint its own secretary

Purpose
The purpose of the committee is to:

• Identify major areas of risk for IOP and its subsidiary companies and to ensure processes exist to manage risk in these areas;
• Ensure risk management, internal audit and external audit processes are administered effectively;
• Bring to the attention of the Council any areas of high risk and/or any anomalies brought to light through the audit process;
• Be available to ‘whistle blowers’ regarding risk areas or audit anomalies who are not satisfied with the outcomes of the normal management processes  in respect of the issues they have raised.

Authority
The committee is authorised by Council to:

• Investigate any activity within its terms of reference;
• Seek, and be provided with, any information it requires from any employee, officer or agent of the Institute of Physics and its subsidiary companies;
• Obtain outside legal or other professional advice and invite such advisors to meetings as necessary, within such budgets as Council may allocate.

Membership
The committee will have a minimum of 5 members, including the Chair, appointed by Council. (The intention is that there will be 6 – 7 members consisting of the Chair, the IOPP NED, and 4 – 5 others from the current/recent Council members and external representative categories)

• Chair, who should be a current Council member
• Current or recent Council members, at least 1 of whom being a current member
• A non-executive director (NED) of Institute of Physics Publishing Ltd. The term of office for this member will automatically cease if they cease to be an NED for IOPP Ltd.
• Up to 3 external members with relevant experience. Where this specialist expertise is in such areas as audit and risk management, it is not necessary for them to be members of the Institute of Physics.
• The quorum is 3 members, with at least 2 current or former members of Council.
• Term of office: 4 years, or the remaining length of term on Council, whichever is the shorter, except as noted below. Members may be re-appointed for one further term. 
• The current President, President-elect, Honorary Officers and Vice-Presidents may not be members of the committee.

Meetings

• The committee should meet at least three times per year, at appropriate dates to coincide with the financial reporting cycle. 
• The external auditors and internal auditors should attend for part of one meeting without IOP management present.
• Internal or external auditors can request a meeting if they consider that one is necessary.
• The Committee may appoint its own secretary

Responsibilities
The responsibilities of the Committee shall include, for IOP and its subsidiary companies, the following:

• Oversee the appointment, independence and rotation of the external and internal auditors
• Recommend the external audit fee to the Council and the appropriate Boards and advise on the implications of any non-audit services provided by the auditors
• Agree the nature and scope of the external audit and review the auditors’ quality control procedures
• Review the external auditors’ management letters and management responses
• Review the internal audit programmes, resources to achieve them and management response to any major recommendations
• Review the processes for internal financial control, financial reporting and risk management
• Review the risk registers and the plans and processes in place to manage and mitigate major risks
• From time to time to investigate certain processes or risks in more detail
• Review the procedures for handling allegations from whistleblowers and act as the ultimate destination of whistleblowers who are not satisfied by the response through the normal channels
• Consider other topics referred to it by Council or the subsidiary company Boards

Reporting

• The Chair shall prepare a report to Council after each meeting
• At least one member of the committee shall normally attend the Council and F&I Board meetings at which the annual accounts are approved
• The committee shall conduct an annual review of its work and these terms of reference and make recommendations to Council and the relevant company Boards
• The committee's duties and activities shall be disclosed in the annual financial statements
• The Chair or another member of the committee who is an Institute of Physics member shall attend the AGM and answer questions