PURPOSE
The audit committee shall represent and assist
the board of directors in fulfilling its oversight responsibilities
for the integrity of the Company’s financial statements and
internal controls, the Company’s compliance with legal and regulatory
requirements, the independent registered public accounting firm’s
qualifications and independence, and the performance of the Company’s
internal audit function and the independent registered public accounting
firm.
PURPOSE (cont.)
In performing its oversight role, the audit committee is specifically empowered to investigate any matter it deems necessary with full access to all books, records, facilities, and personnel of the Company and is specifically authorized to engage and obligate the Company to compensate independent counsel and other advisors as it deems necessary.
COMPOSITION
The audit committee shall be composed of at least three members, each of whom shall: (a) be independent directors as determined under the rules of the principal exchange on which the Company’s securities are traded [NASDAQ § 4350(d)(2)(A) and § 4200(a)(15)]; (b) meet the criteria for independence set forth in Section 10A(m)(3) of the Securities Exchange Act of 1934; and (c) not have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years.
Each member of the audit committee shall be able to read and understand fundamental financial statements, including balance sheets, income statements, and cash flow statements. At least one member of the audit committee shall have had past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.
The Company’s board of directors shall determine the qualification of directors to serve on the audit committee and may at any time, in its complete discretion, remove any member of the audit committee and may fill any vacancy on the audit committee. The audit committee chair shall be designated by the board of directors.
RESPONSIBILITIES
The audit committee shall carry out the identified responsibilities in each of the following areas:
Independent Registered Public Accounting Firm
The audit committee shall:
be directly responsible for the appointment and termination, compensation,
and oversight of the independent registered public accounting firm,
including resolving disagreements between management and the independent
registered public accounting firm regarding financial reporting;
preapprove all audit and any nonaudit services provided by the independent
registered public accounting firm and shall ensure that the Company
does not engage the independent registered public accounting firm
to perform any nonaudit services that are proscribed by law or regulation;
at least annually, obtain and review a report by the independent registered
public accounting firm describing that firm’s internal quality
control procedures; any material issues raised by the most recent
internal quality control review or peer review, or Public Company
Accounting Oversight Board review, of the firm or by any inquiry or
investigation by governmental or professional authorities within the
preceding five years respecting one or more independent audits carried
out by that firm and any steps taken to deal with any such issues;
and all relationships between the independent registered public accounting
firm and the Company;
at least annually, consider the independence of the independent registered
public accounting firm, including whether the provision by the independent
registered public accounting firm of permitted nonaudit services is
compatible with independence, and obtain and review a report from
the independent registered public accounting firm describing all relationships
between the firm and the Company;
ensure the rotation of the lead audit partner of the independent registered
public accounting firm as required by applicable law and regulation
and consider whether there should be regular rotation of the audit
firm itself; and
set clear hiring policies for employees or former employees of the
independent registered public accounting firm.
Internal Audit and Control
The audit committee shall:
oversee the adequacy and effectiveness of the Company’s internal
control system including information, technology, security, and control;
review with the independent registered public accounting firm, as
necessary, the Company’s internal audit function and management:
(a) the adequacy and effectiveness of the systems of internal controls
(including any significant deficiencies and significant changes in
internal controls reported to the audit committee by the independent
registered public accounting firm or management), accounting practices,
and disclosure controls and procedures (and management reports thereon)
of the Company and its subsidiaries; and (b) current accounting trends
and developments, and take such action with respect thereto as may
be deemed appropriate; and
review with management the plans, activities, staffing, and organizational
structure of the internal audit and review the effectiveness of the
internal audit function.
Financial Statements and Periodic Reports
The audit committee shall:
review significant accounting and reporting issues and understand
their impact on the financial statements, including:
-- complex or unusual transactions and highly judgmental areas;
-- major issues regarding accounting principles and financial statement
presentations, including any significant changes in the Company’s
selection or application of accounting principles; and
-- the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of the Company;
review analyses prepared by management and the independent registered
public accounting firm setting forth significant financial reporting
issues and judgments made in connection with the preparation of the
financial statements, including analysis of the effects of alternative
GAAP methods on the financial statements;
review with management and the independent registered public accounting
firm the results of the audit, including any difficulties encountered
by the independent registered public accounting firm, any restrictions
on the scope of the independent registered public accounting firm’s
activities or on access to requested information, and any significant
disagreements with management;
review and discuss the annual audited financial statements and quarterly
financial statements with management and the independent registered
public accounting firm, including the Company’s disclosures
under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” or any similar item in
the Company’s periodic reports;
review disclosures made by the chief executive officer and chief financial
officer in connection with their certifications of annual and quarterly
periodic reports about deficiencies in the design or operation of
internal controls or any fraud that involves management or other employees
that have a significant role in the Company’s internal controls;
review and discuss all earnings and press releases, as well as financial
information and earning guidance provided to analysts and rating agencies;
and
prepare and sign the report that is required to be included in the
Company’s annual proxy statement.
Compliance and Additional Duties
The audit committee shall:
review the effectiveness of the Company’s system for monitoring
compliance with applicable laws and regulations and the results of
management’s investigative follow-up, including any disciplinary
action of any instances of noncompliance;
establish procedures for:
-- the receipt, retention, and treatment of complaints received by
the Company regarding accounting, internal accounting controls, or
auditing matters; and
-- confidential anonymous submission by Company employees of concerns
regarding questionable accounting or auditing matters;
adopt a formal document retention policy with respect to the performance
by the audit committee of its duties in general and including in particular
the protection of documents related to whistleblower complaints and
to the audit processes of the Company;
review the findings of any examinations of the Company by regulatory
agencies;
review and assess the adequacy of the audit committee charter annually,
recommending changes to the board of directors as appropriate;
confirm annually that the audit committee has performed all of its
assigned responsibilities; and
evaluate the performance of the audit committee and of each individual
member at least annually and present the results of that evaluation
to the board of directors.
MEETINGS
The audit committee shall meet at least four times a year, with authority to convene additional meetings as it determines necessary. Each audit committee member is expected to attend each meeting, in person or via telephone or video conference. The audit committee shall invite members of management, the independent registered public accounting firm, or others to attend meetings and provide pertinent information as it deems necessary. The audit committee shall also meet separately with management and with the independent registered public accounting firm as it deems necessary.
The audit committee shall have appropriate briefing materials prepared at the direction of the audit committee chair, and provided in advance to the members of the audit committee. Minutes of each meeting of the audit committee shall be prepared and presented by the audit committee to the board of directors.
Except when the audit committee as a whole is required by applicable law or regulation to conduct certain activities, the audit committee may delegate activities to one or more of its members; however, the member or members shall be required to report on any such activities at a meeting of the entire audit committee
ADOPTED
August 1, 2008
