CITIGROUP INC. AUDIT COMMITTEE CHARTER As of January 18, 2018

Transcription

1 CITIGROUP INC. AUDIT COMMITTEE CHARTER As f January 18, 2018 Missin The Audit Cmmittee ( Cmmittee ) f Citigrup Inc. ( Citigrup r the Cmpany ) is a standing cmmittee f the Bard f Directrs ( Bard ). The purpse f the Cmmittee is t assist the Bard in fulfilling its versight respnsibility relating t (i) the integrity f Citigrup s cnslidated financial statements, financial reprting prcess and systems f internal accunting and financial cntrls; (ii) the perfrmance f the internal audit functin ( Internal Audit ); (iii) the annual independent integrated audit f Citigrup s cnslidated financial statements and effectiveness f Citigrup s internal cntrl ver financial reprting, the engagement f the independent registered public accunting firm ( Independent Auditrs ) and the evaluatin f the Independent Auditrs qualificatins, independence and perfrmance; (iv) plicy standards and guidelines fr risk assessment and risk management; (v) Citigrup s cmpliance with legal and regulatry requirements, including Citigrup s disclsure cntrls and prcedures; and (vi) the fulfillment f the ther respnsibilities set ut herein. The reprt f the Cmmittee required by the rules f the Securities and Exchange Cmmissin ( SEC ) shall be included in Citigrup s annual prxy statement. While the Cmmittee has the respnsibilities and pwers set frth in this Charter, it is nt the duty f the Cmmittee a) t plan r cnduct integrated audits, which is the respnsibility f the Independent Auditrs r b) t determine that Citigrup s financial statements and disclsures are cmplete and accurate and are in accrdance with generally accepted accunting principles and applicable rules and regulatins, which is the respnsibility f management. The Cmmittee may take int cnsideratin the Independent Auditr s views and matters cmmunicated t it by the Independent Auditrs when reprting t the Bard. Membership The Cmmittee shall be cmprised f at least three members f the Bard, and the members shall meet the independence, experience, and expertise requirements f the New Yrk Stck Exchange and ther applicable laws and regulatins (including the Securities Exchange Act f 1934, as amended, and the Sarbanes-Oxley Act f 2002). A majrity f the members f the Cmmittee shall cnstitute a qurum. A member f the Audit Cmmittee may nt serve n mre than three public cmpany audit cmmittees, including the Cmpany s Audit Cmmittee. At least ne member f the Cmmittee will qualify as an audit cmmittee financial expert as defined by the SEC. The members f the Cmmittee and the Cmmittee Chair shall be appinted by, and may be remved by, the Bard n the recmmendatin f the Nminatin, Gvernance and Public Affairs Cmmittee. Cmmittee membership shall be rtated peridically, and the Cmmittee Chair shall be rtated peridically. 1 f 8

2 Authrity The Cmmittee shall have the sle authrity t select, evaluate, appint, and replace the Independent Auditrs (subject t stckhlder ratificatin) and shall apprve in advance all audit engagement fees and terms and all audit-related, tax cmpliance and ther nn-audit engagements with the Independent Auditrs. The Cmmittee shall cnsult with management n, but shall nt delegate, these respnsibilities. The Cmmittee shall have the authrity, t the extent it deems necessary r apprpriate, t retain special legal, accunting, r ther cnsultants t advise the Cmmittee. Citigrup shall prvide funding, as determined by the Cmmittee, fr payment f cmpensatin t the Independent Auditrs, any advisrs emplyed by the Cmmittee and rdinary administrative expenses f the Cmmittee. The Cmmittee may frm and delegate authrity t subcmmittees, cmprised f ne r mre members f the Cmmittee, as necessary r apprpriate. Each subcmmittee shall have the full pwer and authrity f the Cmmittee, subject t any limitatins impsed by the Cmmittee. The Cmmittee is empwered t apprve and amend plicies and prgrams falling under its purview, except fr certain plicies and prgrams that require the apprval f the Cmpany s Bard f Directrs (as set frth belw). Duties and Respnsibilities The Cmmittee shall have the duties and respnsibilities set frth belw. Meetings and Access Meet as ften as it determines, but nt less frequently than quarterly. Meet peridically, separately, with management; Internal Audit; and the Independent Auditrs. Ensure that emplyees perfrming an internal audit functin and any independent public accuntant r ther external auditr have unrestricted access t the Cmmittee. Regularly reprt t the Bard n the Cmmittee s activities. Cnduct an annual evaluatin f the Cmmittee s perfrmance and reprt the results t the Bard. Review and assess the adequacy f this Charter annually and recmmend any prpsed changes t the Bard r a cmmittee theref fr apprval. Financial Statement and Disclsure Matters Review and discuss with management and the Independent Auditrs the annual audited cnslidated financial statements f Citigrup as well as Management s Discussin and Analysis f Financial Cnditin and Results f Operatins 2 f 8

3 ( MD&A ), and recmmend t the Bard whether the audited cnslidated financial statements shuld be included in Citigrup s Frm 10-K. Apprve the filing f Citigrup s Frm 10-K with the SEC. Review and discuss with management and the Independent Auditrs the quarterly unaudited cnslidated financial statements f Citigrup as well as the MD&A and the results f the Independent Auditrs reviews f the quarterly unaudited cnslidated financial statements, prir t the filing f each f Citigrup s Frm 10- Qs. The Cmmittee need nt apprve the filing f each Citigrup Frm 10-Q with the SEC. Discuss generally with management, prir t release, Citigrup s quarterly earnings press releases and accmpanying financial infrmatin, as well as earnings guidance, if any, prvided t analysts and ratings agencies. The Cmmittee need nt apprve each earnings release r earnings guidance prir t issuance. Review and discuss with management (1) any significant deficiencies r material weaknesses in the design r peratin f Citigrup s internal cntrl ver financial reprting, and (2) any fraud, whether r nt material, invlving management r ther emplyees wh have a significant rle in Citigrup s internal cntrl ver financial reprting. Review and discuss peridically reprts frm the Independent Auditrs including items under Auditing Standards Ns. 16 and 18 and ther applicable auditing standards, as adpted by the Public Cmpany Accunting Oversight Bard, applicable law r listing standards, such as, amng ther things, certain: º Critical accunting plicies and estimates and practices t be used; º Alternative treatments f financial infrmatin within U.S. generally accepted accunting principles; º Significant unusual transactins; º New accunting prnuncements; º Schedules f uncrrected audit misstatements; º Other material written cmmunicatins between the Independent Auditrs and management, such as any management letter and Citigrup s respnse t such letter r schedule f unadjusted differences; and º Difficulties encuntered in the curse f the audit wrk, including any restrictins n the scpe f activities r access t requested infrmatin, any significant disagreements with management, and cmmunicatins between the audit team and the audit firm s natinal ffice with respect t difficult auditing r accunting issues presented by the engagement. Review and discuss with management and the Independent Auditrs, at least annually: º Develpments and issues with respect t lan lss and ther reserves; º Regulatry and accunting initiatives, as well as ff-balance sheet structures, 3 f 8

4 and their effect n Citigrup s cnslidated financial statements; and º Accunting plicies used in the preparatin f Citigrup s cnslidated financial statements and, in particular, thse plicies fr which management is required t exercise discretin r judgment regarding the implementatin theref. Review with management its evaluatin f Citigrup s internal cntrl structure and prcedures fr financial reprting and review peridically, but in n event less frequently than quarterly, management s cnclusins abut the efficacy f such internal cntrls and prcedures, including any significant deficiencies r material weaknesses in such cntrls and prcedures. Annually review and discuss with management and the Independent Auditrs (1) management s assessment f the effectiveness f Citigrup s internal cntrl structure and prcedures fr financial reprting and (2) the Independent Auditrs reprt n the effectiveness f Citigrup s internal cntrl ver financial reprting related t Sectin 404 f the Sarbanes-Oxley Act f Establish prcedures fr the receipt, retentin, and treatment f cmplaints received by Citigrup regarding accunting, internal accunting cntrls, r auditing matters, and the cnfidential, annymus submissin by emplyees f Citigrup f cncerns regarding questinable accunting r auditing matters. Oversight f Citigrup s Relatinship with the Independent Auditrs Receive and discuss a reprt frm the Independent Auditrs at least annually regarding: º The Independent Auditrs specialized skill r knwledge needed t perfrm the planned audit prcedures and evaluate the audit results; º The Independent Auditrs internal quality-cntrl prcedures; º Any material issues raised by the mst recent internal quality-cntrl review, PCAOB inspectin r peer review (if applicable), f the Independent Auditrs, r by any inquiry r investigatin by gvernmental r prfessinal authrities within the preceding five years respecting ne r mre independent audits carried ut by the Independent Auditrs; º Any steps taken t deal with any such issues; º All relatinships between the independent auditrs and Citigrup, in rder t assess the Independent Auditrs independence; and º Key staffing and lead audit partner rtatin plans. Evaluate the qualificatins, perfrmance and independence f the Independent Auditrs, including whether the prvisin f nn-audit services is cmpatible with maintaining the auditrs independence, and taking int accunt the pinins f management and Internal Audit. This shall include a review and discussin f the annual cmmunicatin as t independence delivered by the Independent Auditrs (PCAOB Rule 3526 Cmmunicatin with Audit Cmmittees Cncerning Independence ). The Cmmittee shall present its cnclusins t the Bard, and if s determined by the Cmmittee, recmmend that the Bard take additinal actin t 4 f 8

5 satisfy itself f the qualificatins, perfrmance and independence f the auditrs. Discuss whether t recmmend that the Bard apprve the retentin f the current Independent Auditr and ask the Cmpany s stckhlders t ratify the selectin. Discuss whether t recmmend that the Bard apprve the replacement f the Independent Auditr and the Cmpany s stckhlders t ratify the selectin f a new Independent Auditr. Apprve guidelines fr the retentin f the Independent Auditrs fr any nn-audit services and determine prcedures fr the apprval f audit, audit-related, tax cmpliance and ther nn-audit services in advance. In accrdance with such prcedures, the Cmmittee shall apprve in advance any audit, audit-related, and tax cmpliance services prvided t Citigrup by the Independent Auditrs. Preapprval authrity may be delegated t ne r mre members f the Cmmittee. Review and apprve the scpe and plan f the independent audit. Obtain cnfirmatin annually frm the Independent Auditr that the audit was cnducted in a manner cnsistent with the requirements cntained in Sectin 10A f the Securities Exchange Act f 1934, as amended. Review and discuss plicies fr Citigrup s hiring f emplyees r frmer emplyees f the Independent Auditrs. Oversight f Risk Assessment and Risk Management The Cmmittee s respnsibilities pertaining t Risk are as set frth belw and d nt extend t risk matters t the extent they are reprted n t anther cmmittee f the Bard. In cnsultatin with the Risk Management Cmmittee, and as required by New Yrk Stck Exchange rules, review and discuss with management, at least annually: the key guidelines and plicies gverning Citigrup s significant prcesses fr risk assessment and risk management; and Citigrup s majr financial risk expsures and the steps management has taken t mnitr and cntrl such expsures. With respect t peratinal risk, review with management matters related t the effectiveness f Citigrup s cntrl envirnment and the status f crrective actins. Oversight f Internal Audit Review and apprve the appintment and replacement f the Chief Auditr wh shall reprt directly t the Cmmittee. The Cmmittee shuld publicly disclse the appintment and dismissal f the Chief Auditr frm his r her psitin. Reasns fr the Chief Auditr s dismissal shuld be discussed with the Cmpany s supervisrs. 5 f 8

6 Apprve the Chief Auditr's base cmpensatin, adjustments and incentive cmpensatin. Review and discuss any significant Internal Audit findings that have been reprted t management, management s respnses, and the prgress f the related crrective actin plans. Review and evaluate the adequacy f the wrk perfrmed by the Chief Auditr and Internal Audit, and ensure that Internal Audit is independent and has adequate resurces t fulfill its duties, including implementatin f the annual audit plan. Review and apprve a written talent management prgram that prvides fr develpment, recruitment, and successin planning fr the Citigrup Chief Auditr, his r her direct reprts and ptential successrs. Apprve all significant aspects f utsurcing arrangements fr Internal Audit. Internal Audit will retain versight f its utsurced arrangements and will reprt identified audit deficiencies in a manner cnsistent with thse prvided by Internal Audit. Review and apprve the Internal Audit Charter. Cmpliance and Regulatry Oversight Respnsibilities Review and discuss with management, at least annually, the implementatin and effectiveness f each f the Cmpany s cmpliance and ethics prgram, including the prcesses fr reslutin f cmpliance and ethics issues, which include the cnfidential, annymus submissin by emplyees f the Cmpany f cncerns regarding questinable accunting r auditing matters. In cnnectin with such review, btain, at least annually, frm the Chief Cmpliance Officer (and the ther persns, if any, with peratinal respnsibility fr the Cmpany s cmpliance and ethics prgram) reprts regarding the implementatin and effectiveness f such prgram. Such respnsibility may be fulfilled by ne r mre presentatins t the full Bard. The Chief Cmpliance Officer and any ther persn r persns with such peratinal respnsibility shall have the authrity t cmmunicate directly with the Cmmittee cncerning cmpliance and ethics issues as such persn r persns deem necessary, including between meetings f the Cmmittee. Review and discuss with management, at least annually, the effectiveness f the Cmpany s anti-mney laundering cmpliance prgram (the AML Prgram ). Review with management Citi s Glbal Sanctins Plicy and the Sanctins Risk Appetite Statement and apprve the Plicy and Statement and any material changes theret. Review peridically with management, including the Citigrup Chief Risk Officer, the Chief Cmpliance Officer and the General Cunsel, and the Independent Auditrs, 6 f 8

7 any significant crrespndence with, r ther actin by, regulatrs r gvernmental agencies, any material legal affairs f Citigrup and Citigrup s cmpliance with applicable law and listing standards. Receive regular reprts n the schedule and results f significant regulatry examinatins in the United States and abrad, including the nature and status f crrective actins. Receive regular reprts n significant issues that ptentially create regulatry attentin, including briefings n business decisins r significant issues that arise in areas n which the regulatrs are fcused r that therwise generate regulatry scrutiny r actins. Oversee and receive reprts n nging regulatry prjects, including regular updates n significant lng-term prjects being implemented in respnse t particular regulatry issues r cncerns, except t the extent anther Cmmittee f the Bard receives reprts n specific regulatry prjects. Receive peridic briefings n the key cntrls and prcesses in specific business r functinal areas, in particular with respect t areas that are the subject f regulatry cncern. Receive peridic briefings n existing r prpsed regulatins in the United States and abrad that culd significantly impact Citigrup s business activities, including peridic briefings n the nature f the regulatry envirnment in the United States and abrad. Review and discuss with management the strategy fr and status f Citigrup s key regulatry relatinships in the United States and abrad. Review whether senir management has established apprpriate incentives t integrate cmpliance bjectives int the management gals, perfrmance reviews and cmpensatin structure acrss Citigrup, and that apprpriate actins and ther measures are taken when cmpliance failures are identified, including disciplinary actins fr serius cmpliance failures. Annually review and apprve management's evaluatin f the effectiveness f Citigrup s systems and prcesses used t calculate risk-based capital requirements. Receive and discuss reprts frm management n an annual and as needed basis relating t: significant reprted ethics vilatins; cmpliance with regulatry internal cntrl and cmpliance reprting requirements; cmpliance with Federal Financial Institutins Examinatin Handbk III.C.4 (Business Cntinuity); fraud and perating lsses; 7 f 8

8 internal and external fraud incidents, and assciated cntrl enhancements and remediatin plans; technlgy and infrmatin security, including cybersecurity; data quality; and Citigrup s and subsidiaries insurance. Other Respnsibilities Review and discuss the reprt f the Chief Auditr regarding the expenses f, the perquisites paid t, and the cnflicts f interest, if any, f members f Citigrup s senir management. Review and discuss with management, at least annually, the Cmpany s plicies and cntrl systems used t manage third-party vendr relatinships. Review and discuss with the Chief Tax Officer tax plicies, accruals, develpments and ther related matters. Review and discuss management s annual reprt regarding Citigrup s pensin plans. 8 f 8