The Audit Sub-Committee

1. to help Members of the Exchange Fund Advisory Committee (EFAC) to discharge their responsibilities for ensuring the proper and smooth running of the HKMA operations and management of the Exchange Fund;
2. to consider any matters relating to the financial affairs of the HKMA and the internal and external audit of the HKMA's financial statements as the Sub-Committee may think necessary or desirable;
3. to encourage higher quality accounting and audit and provide more credible and objective financial reporting of the HKMA; and
4. to consider any other matters referred to it by EFAC; and to report on all such matters to EFAC.

1. reviewing the HKMA's financial statements, the composition and accounting principles adopted in such statements, whether these are intended to be audited or published or not;
2. advising on the form and content of the financial statements of the HKMA;
3. examining and reviewing with both the external and internal auditors the scope and results of their audits;
4. reviewing the findings, recommendations or criticisms of the auditors, including their annual management letter and management's response;
5. reviewing the HKMA's management procedures to ensure the effectiveness of internal systems of accounting and control, and management's efforts to correct deficiencies discovered in audits; and
6. initiating investigations or audit reviews into any activities of the HKMA which may be of concern or interest to the Sub-Committee.

The Sub-Committee shall be entitled to obtain any information it requires from any member or employee of the HKMA, and all such members and employees shall be instructed to assist the Sub-Committee to the fullest extent possible. The Sub-Committee may also take such independent legal or other professional advice as it considers necessary. The Sub-Committee shall have no executive powers as regards its findings and recommendations.

The Sub-Committee shall meet at least twice a year. The Secretary to EFAC shall attend its meetings and take minutes, copies of which shall be circulated to EFAC. The Chief Executive of the HKMA shall be entitled to attend the Sub-Committee's meetings. In all other respects, the Sub-Committee shall decide its own procedures.