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17.
Review major financial, operating and other risk exposures and the guidelines,
policies and insurance that management has put in place to govern the process of
assessing, controlling, managing and reporting such exposures. Receive reports from
officers responsible for oversight of particular risks within Rare Element upon change of
any relevant policy, practice or circumstance within their department.
18.
Review and evaluate at least annually Rare Element’s policies and procedures for
maintaining and investing cash funds and for hedging (
metals, foreign currency, etc
.) as
detailed in the corporate treasury policy. Approve any variations from the corporate
treasury policy that may be required from time to time.
19.
Evaluate whether management is setting the appropriate tone at the top by
communicating the importance of internal controls and ensuring that all supervisory and
accounting employees understand their roles and responsibilities with respect to internal
controls.
Annual and Interim Financial Statements
20.
Review, evaluate and discuss with Rare Element’s management and outside auditors
(a) the nature and extent of any significant changes in Canadian and U.S. accounting
principles, (b) the application of significant accounting and reporting principles,
(c) practices and procedures applied in preparing the financial statements, (d) all critical
accounting policies and practices to be used, (e) any major changes to Rare Element’s
accounting or reporting principles, practices or procedures, including those required or
proposed by professional or regulatory pronouncements and actions, as brought to its
attention by management or the outside auditors, and (f) any material written
communications between the outside auditors and management, such as any management
letter or schedule of unadjusted differences.
21.
Review and discuss with outside auditors alternative treatments of financial
information under generally accepted accounting principles, including pro forma
financial information, the ramifications of each treatment and the method preferred by the
outside auditors.
22.
Review and discuss with outside auditors the matters required to be discussed by
Statement on Auditing Standards No. 114 (The Auditor’s Communication With Those
Charged With Governance) relating to the conduct of the audit. Review the scope,
plan and procedures to be used on the annual audit and receive confirmation from the
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