Anda di halaman 1dari 7

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

Approved: November 8, 2011


I.

Purpose and authority

The Audit Committee is established by and among the Board of Directors (the Board) for the primary
purpose of assisting the Board in:

Overseeing the integrity of the Companys financial statements and the Companys accounting and
financial reporting processes and financial statement audits;
Overseeing the Companys compliance with legal and regulatory requirements;
Overseeing the independent auditors or other registered public accounting firms qualifications
and independence;
Overseeing the performance of the Companys independent auditor and internal audit function;
Overseeing the Companys systems of disclosure controls and procedures, internal control over
financial reporting, and compliance with ethical standards adopted by the Company.

The management of the Company is responsible for the preparation, presentation and integrity of the
Companys financial statements and for the effectiveness of internal control over financial reporting.
Management and the internal auditing department are responsible for maintaining appropriate
accounting and financial reporting principles and policies and internal controls and procedures that
provide for compliance with accounting standards and applicable laws and regulations. The independent
auditors are responsible for planning and carrying out a proper audit of the Companys annual financial
statements and of the Companys internal control over financial reporting, reviews of the Companys
quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, and other
procedures. In fulfilling their responsibilities hereunder, it is recognized that members of the Audit
Committee are not full-time employees of the Company and are not, and do not represent themselves
to be, performing the functions of auditors or accountants. As such, it is not the duty or responsibility of
the Audit Committee or its members to conduct field work or other types of auditing or accounting
reviews or procedures or to set auditor independence standards.
The Audit Committee shall have the resources and authority to conduct investigations into any matters
within its scope of responsibility and obtain advice and assistance from outside legal, accounting, or
other advisors, as necessary, to perform its duties and responsibilities.
In carrying out its duties and responsibilities, the Audit Committee shall also have the authority to meet
with and seek any information it requires from employees, officers, directors, or external parties.
The Company will provide appropriate funding, as determined by the Audit Committee, for
compensation to the independent auditor, any other registered public accounting firm engaged for the
purpose of preparing or issuing an audit report or to perform audit, review or attestation services for
the Company and any advisers that the Audit Committee chooses to engage and for payment of
ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying
out its duties.
The Audit Committee will primarily fulfill its responsibilities by carrying out the activities enumerated in
Section III of this charter.
1

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


Approved: November 8, 2011

II. Composition and Meetings


The Audit Committee will be comprised of three or more directors as determined by the Board, each of
whom (i) is independent as that term is defined under the listing standards of The Nasdaq Stock
Market, Inc. (Nasdaq); (ii) meets the criteria for independence set forth in Rule 10A-3(b)(1) under the
Securities Exchange Act of 1934, as amended (the Exchange Act) (subject to the exemptions provided
in Rule 10A-3(c) under the Exchange Act); and (iii) has not 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. The determination of independence will be made by the Board.
All members of the Audit Committee must comply with all financial-literacy requirements of Nasdaq.
Specifically, all members of the Audit Committee must be able to read and understand fundamental
financial statements, including a companys balance sheet, income statement and cash flow
statement. At least one member will qualify as an Audit Committee financial expert as defined by
the Securities and Exchange Commission (the SEC) and shall have past employment experience in
finance or accounting, requisite professional certification in accounting, or any other comparable
experience or background which results in the individuals financial sophistication. Designation as an
Audit Committee financial expert will not increase the duties, obligations or liability of the designee as
compared to the duties, obligations and liability imposed on the designee as a member of the Audit
Committee and of the Board.
Generally, no member of the Audit Committee may serve simultaneously on the Audit Committees of
more than three (3) public companies without a specific Board determination that such simultaneous
service will not impair the ability of such Committee member to serve on the Committee.
Audit Committee members will be nominated by the Nomination and Corporate Governance Committee
and appointed by a majority of the Board at the annual organizational meeting of the Board to serve
until their successors are appointed. Unless a chairperson is elected by the full board, the members of
the Audit Committee may designate a chairperson by majority vote.
The Audit Committee will meet at least quarterly, and more frequently as circumstances dictate. The
Audit Committee chairperson will approve the agenda for the Audit Committees meetings and any
member may suggest items for consideration. Briefing materials will be provided to the Audit
Committee as far in advance of meetings as reasonably practicable. Each regularly scheduled meeting
will conclude with an executive session of the Audit Committee absent members of management. As
part of its responsibility to foster open communication, the Audit Committee will meet periodically with
management, the director of the internal audit function, and the independent auditor in separate
executive sessions. In addition, the Audit Committee will meet with the independent auditor and
management to discuss the annual audited financial statements and quarterly financial statements,
including the Companys disclosures under Managements Discussion and Analysis of Financial
Condition and Results of Operations. The Audit Committee may request any officer or employee of the
Company or the Companys outside counsel or independent auditors to attend a meeting of the Audit
Committee or to meet with any members of, or consultants to, the Audit Committee. Members of the
2

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


Approved: November 8, 2011
Audit Committee may participate in a meeting of the Audit Committee by means of conference call or
similar communications equipment by means of which all persons participating in the meeting can hear
each other.
III. Responsibilities and duties
To fulfill its responsibilities and duties, the Audit Committee will:
Documents/reports/accounting information review
1. Review this charter at least annually and recommend to the Board any necessary amendments.
2. Meet with management and the independent auditor to review and discuss the Companys
annual financial statements and quarterly financial statements (prior to the Companys Form 10Q filings or release of earnings), as well as all internal control reports (or summaries thereof).
Review other relevant reports or financial information submitted by the Company to any
governmental body or the public, including management certifications as required by the
Sarbanes-Oxley Act of 2002 and relevant reports rendered by the independent auditor (or
summaries thereof).
3. Recommend to the Board whether the financial statements should be included in the annual
report on Form 10-K.
4. Discuss earnings press releases, including the type and presentation of information, paying
particular attention to any pro forma or adjusted non-GAAP information. Such discussions may
be in general terms (i.e., discussion of the types of information to be disclosed and the type of
presentations to be made).
5. Discuss financial information and earnings guidance provided to analysts and ratings agencies.
Such discussions may be in general terms (i.e., discussion of the types of information to be
disclosed and the type of presentations to be made).
6. Review the regular internal reports to management (or summaries thereof) prepared by the
internal audit function, as well as managements response.
Independent auditor
7. Appoint (and recommend that the Board submit for shareholder ratification, if applicable),
compensate, retain, and oversee the work performed by the independent auditor retained for
the purpose of preparing or issuing an audit report or related work. Review the performance and
independence of the independent auditor and remove the independent auditor if circumstances
warrant. The independent auditor will report directly to the Audit Committee and the Audit
Committee will oversee the resolution of disagreements between management and the
independent auditor if they arise.
8. Appoint, compensate, retain and oversee the work performed by any other registered public
accounting firm engaged for the purpose of preparing or issuing an audit report or to perform
audit, review or attestation services, which firm shall also report directly to the Audit Committee.
9. Consider whether the auditors provision of permissible non-audit services is compatible with the
auditors independence. Discuss with the independent auditor the matters required to be
discussed under Statement on Auditing Standards (SAS) No. 61, as amended by AU Section 380,
as adopted by the Public Company Accounting Oversight Board (the PCAOB).
10. Review with the independent auditor any problems or difficulties and managements response.
3

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


Approved: November 8, 2011
11. Review the independent auditors report on the Companys assessment of internal control over
financial reporting.
12. Hold timely discussions with the independent auditor regarding the following:
All critical accounting policies and practices
All alternative treatments of financial information within generally accepted accounting
principles (GAAP) related to material items that have been discussed with management,
ramifications of the use of such alternative disclosures and treatments and the treatment
preferred by the independent auditor; and
Other material written communications between the independent auditor and management.
13. At least annually, obtain and review a report by the independent auditor describing:
The independent auditors internal quality-control procedures;
Any material issues raised by the most recent internal quality-control review or peer review,
or by any inquiry or investigation conducted by governmental or professional authorities
during the preceding five years with respect to independent audits carried out by the
independent auditor, and any steps taken to deal with such issues; and
All relationships between the independent auditor and the Company addressing the matters
set forth in PCAOB Rule 3526.
This report should be used to evaluate the independent auditors qualifications, performance, and
independence. In addition, the Audit Committee shall take into account the opinions of
management and the Companys internal auditors in assessing the independent auditors
qualifications, performance and independence. Further, the Audit Committee will review the
experience and qualifications of the lead partner each year and discuss with management partner
rotation requirements, as promulgated by applicable rules and regulations. The Audit Committee
will also consider whether there should be rotation of the independent auditor itself.
14. Receive from the independent auditors annually a formal written statement of the fees billed in
each of the last two fiscal years for each of the following categories of services rendered by the
independent auditors: (i) the audit of the Companys annual financial statements and the reviews
of the financial statements included in the Companys Quarterly Reports on Form 10-Q or
services that are normally provided by the independent auditors in connection with statutory and
regulatory filings or engagements; (ii) assurance and related services not included in clause (i)
that are reasonably related to the performance of the audit or review of the Companys financial
statements, in the aggregate and by each service; (iii) tax compliance, tax advice and tax planning
services, in the aggregate and by each service; and (iv) all other products and services rendered
by the independent auditors, in the aggregate and by each service.
15. Actively engage in dialogue with the independent auditor with respect to any disclosed
relationships or services that may affect the independence and objectivity of the auditor.
16. Review and preapprove (which may be pursuant to preapproval policies and procedures) both
audit and non-audit services to be provided by the independent auditor. The authority to grant
preapprovals may be delegated to one or more designated members of the Audit Committee,
whose decisions will be presented to the full Audit Committee at its next regularly scheduled
meeting.
17. Set policies, consistent with governing laws and regulations, for hiring personnel of the
4

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


Approved: November 8, 2011
independent auditor.
18. Obtain from the independent auditors assurance that the audit was conducted in a manner
consistent with Section 10A of the Exchange Act, which sets forth certain procedures to be
followed in any audit of financial statements required under the Exchange Act.
Financial reporting processes, accounting policies, and internal control structure
19. Periodically discuss with management, the independent auditors and, if appropriate, the internal
audit director the adequacy and effectiveness of the Companys disclosure controls and
procedures and the Companys internal control over financial reporting, including any significant
deficiencies and significant changes in internal controls.
20. Advise management, the internal auditing department and the independent auditors that they
are expected to provide to the Audit Committee a timely analysis of significant issues and
practices relating to accounting principles and policies, financial reporting and internal control
over financial reporting.
21. Consider any reports or communications (and managements and/or the internal auditing
departments responses thereto) submitted to the Audit Committee by the independent auditors
required by or referred to in SAS 114 (as codified by AU Section 380), as it may be modified or
supplemented or other professional standards.
22. Discuss with management, the independent auditors and, if appropriate, the internal audit
director the scope of the internal and independent auditors review of internal control over
financial reporting.
23. Receive and review any disclosure from the Companys Chief Executive Officer or Chief Financial
Officer made in connection with the certification of the Companys quarterly and annual reports
filed with the SEC of: a) significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably likely to adversely
affect the Companys ability to record, process, summarize, and report financial data; and b) any
fraud, whether or not material, that involves management or other employees who have a
significant role in the Companys internal controls.
24. Discuss with management, the independent auditors and, if appropriate, the internal audit
director major issues regarding accounting principles and financial statement presentations,
including any significant changes in the Companys selection or application of accounting
principles; major issues as to the adequacy of the Companys internal controls; and any special
audit steps adopted in light of material control deficiencies.
25. Review analyses prepared by management (and the independent auditor as noted in item 13
above) setting forth significant financial reporting issues and judgments made in connection with
the preparation of the financial statements, including analyses of the effects of alternative GAAP
methods on the financial statements.
26. Discuss with management, the independent auditors and, if appropriate, the internal audit
director the effect of regulatory and accounting initiatives, as well as off-balance-sheet
structures, on the financial statements of the Company.
27. Review and approve all related-party transactions, defined as those transactions required to be
disclosed under Item 404 of Regulation S-K.
28. Establish procedures for the receipt, retention, and treatment of complaints regarding
accounting, internal accounting controls, or auditing matters, including procedures for
5

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


Approved: November 8, 2011
confidential, anonymous submissions by Company employees regarding questionable accounting
or auditing matters.
Internal audit
29. Review and advise on the selection and removal of the internal audit director / internal audit
function.
30. Review the activities and organizational structure of the internal audit function, as well as the
qualifications of its personnel.
31. Review and approve the annual internal audit plan of, and any special projects undertaken by,
the internal audit department.
32. Annually, review and recommend changes (if any) to the internal audit charter.
33. Advise the director of the internal auditing department that he or she is expected to provide to
the Audit Committee summaries of and, as appropriate, the significant reports to management
prepared by the internal auditing department and managements responses thereto.
34. Periodically review, with the internal audit director, any significant difficulties, disagreements
with management, or scope restrictions encountered in the course of the functions work.
35. Periodically review, with the independent auditor, the internal audit functions responsibility,
budget, and staffing.
Ethical compliance, legal compliance, and risk management
36. Review the Companys code of business conduct and ethics and periodically assess whether any
updates are required.
37. Review, with the Companys counsel, legal compliance and legal matters that could have a
significant impact on the Companys financial statements, or the Companys business, financial
statements or compliance policies, including material notices to or inquiries received from
governmental agencies.
38. Discuss with management, the independent auditors and, if appropriate, the internal audit
director risk assessment and risk management, including guidelines and policies by which
management assesses and manages such risk, as well as the Companys major financial risk
exposures and the steps management has undertaken to control them.
Reporting
39. Report regularly to the Board regarding the execution of the Audit Committee's duties and
responsibilities, activities, any issues encountered and related recommendations.
40. Review and approve the report that the SEC requires be included in the Companys annual proxy
statement.
Other responsibilities
41. Review, with the independent auditor, the internal audit function and management, the extent
to which changes or improvements in financial or accounting practices have been implemented.
42. Review, with management, the Company's finance function, including its budget, organization,
and quality of personnel.
43. Prepare and review with the Board an annual performance assessment relative to the Audit
Committees purpose, duties, and responsibilities outlined herein. This annual performance
6

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS


Approved: November 8, 2011
evaluation of the Audit Committee shall be conducted in such manner as the Audit Committee
deems appropriate. The report to the Board may take the form of an oral report by the
chairperson of the Audit Committee or any other member of the Audit Committee designated by
the Audit Committee to make this report.
44. Perform any other activities consistent with this charter, the Companys bylaws and governing
laws that the Board or Audit Committee determines are necessary or appropriate.