Subject to any action that may be taken by the full Board, on an annual basis, have the ultimate authority and responsibility to determine the independent auditor's qualifications, independence and compensation, select (or nominate for shareholder ratification), evaluate, and where appropriate, consider the rotation or replacement of the independent auditors.
Review, discuss with management and the independent auditors and approve the annual audited financial statements of the Company including discussion of the Company's disclosures under Management's Discussion and Analysis of Financial Condition and Results of Operations and make a recommendation regarding inclusion of those financial statements in any public filing including the Company's Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of Form 10-K).
Review and consider with the independent auditors the matters required to be discussed by applicable requirements of the Public Company Accounting Standards Oversight Board ("PCAOB") and the SEC.
Review with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures in the Company's financial statements. Such review shall include discussion of critical audit matters and any material changes in accounting policies.
As a whole, or through the Committee chair, review and discuss with management and the independent auditors the Company's interim financial results to be included in the Company's earnings report or quarterly reports to be filed with the SEC on Form 10-Q, including discussion of the Company's disclosures under Management's Discussion and Analysis of Financial Condition and Results of Operations. This review will occur prior to the filing of the Company’s Form 10-Q with the SEC, or the release of any earnings report.
Review and discuss with management any earnings press release and earnings related presentations (paying particular attention to the disclosure of any "pro forma" or "adjusted" non-GAAP financial measures) and financial information and earnings guidance provided to analysts and rating agencies.
Discuss with management and the independent auditors the quality, adequacy and effectiveness of the Company's internal controls, including the responsibilities, budget, compensation and staffing of the Company's internal audit function, and meet regularly and privately with the head of the internal audit function.
Annually request from the independent auditors a formal written statement delineating all relationships between the auditor and the Company consistent with rules promulgated by the SEC and PCAOB. With respect to such relationships, the Committee shall:
Discuss with the independent auditors any disclosed relationships and the impact of the relationship on the independent auditor's independence.
Assess and recommend appropriate action in response to the independent auditor's report to satisfy itself of the auditor's independence.
Approve in advance any services (including the fees and material terms thereof) proposed to be carried out for the Company by the independent auditor or by any other firm proposed to be engaged by the Company as its independent auditor and establish policies and procedures for the engagement of the independent auditor to provide permitted audit and non-audit services.
Confirm the scope of audits to be performed by the independent and internal auditors, monitor progress and review results and review fees and expenses charged by the independent auditors and any party retained to provide internal audit services.
On an annual basis, discuss with the independent auditor the independent auditor's internal quality control procedures, any material issues raised in quality control or peer review and any audits, investigation or inquiries by the PCAOB, governmental or professional authorities within the preceding five years (and any steps to deal with issues raised) regarding the firms' independent audits of its clients. In addition, the Committee will, on a regular basis, review the experience and qualifications of the lead partner and reviewing partner and determine that all partner rotation requirements, as promulgated by applicable rules and regulations, are executed.
Review and discuss significant findings or unsatisfactory internal audit reports, any identified significant deficiencies or material weaknesses, any critical audit matters, and any audit problems or difficulties encountered by the independent auditor in the course of the audit work, including any restrictions on the scope of its activities or on access to requested information, and any significant disagreements with management and monitor management's response to such matters. Without excluding other possibilities, the Committee may wish to review with the independent auditor (i) any accounting adjustments that were noted or proposed by such firm but were "passed" (as immaterial or otherwise), (ii) any communications between the audit team and the audit firm's national office respecting auditing or accounting issues presented by the engagement and (iii) any "management" or "internal control" letter issued, or proposed to be issued, by the independent auditor to the Company.
Provide oversight review and discuss with management, internal auditors and independent auditors the adequacy and effectiveness of the Company's overall risk assessment and risk management process, including major enterprise and financial risk exposures and all risk mitigation processes.
Establish and maintain free and open means of communication between and among the Committee, the Company's independent auditor, the Company's internal audit function, management and the Board.
Discuss with management the Company's significant tax matters and review periodic reports with respect to income tax and other tax obligations.
Review the Company's credit rating agencies' reviews.
Review regularly and consider the Company's environmental reserves and any litigation reserves.
Update the Board on a regular basis with respect to matters that may have a significant impact on the financial condition or affairs of the Company, the Company's compliance with legal or regulatory requirements, the performance and independence of the Company's independent auditors and performance of the internal audit function.
Review significant matters regarding accounting principles and financial statement presentations, significant changes to the Company's selection or application of accounting principles and significant matters relating to the Company's internal controls including any specifically required audit steps to correct identified material internal control issues. The Committee shall also review management and independent auditor analyses regarding significant financial reporting matters and judgments made in preparing financial statements including analyses of alternative GAAP methods as well as the effect of regulatory and accounting initiatives and off-balance sheet structures on the Company's financial statements.
In conjunction with the Board, evaluate the qualifications of its members and its own performance on an annual basis.
Meet separately and privately, on a regular basis, with the independent auditors, internal auditors, and with members of management.
Establish policies regarding the employment and retention of current or former employees of the Company's independent auditor.
With respect to complaints concerning accounting, internal accounting controls or auditing matters:
Review and approve procedures for receipt, retention and treatment of complaints received by the Company, and
Establish procedures for the confidential, anonymous submission of complaints by employees of the Company regarding questionable accounting or auditing matters to the Committee.
Establish levels for payment by the Company of fees of the independent auditors and any advisors retained by the Committee.
Receive regular reports from the Chief Executive Officer, Chief Financial Officer and the Company's Disclosure Committee representative on the status of the Company's disclosure controls and procedures and related certifications, including disclosure of any significant deficiencies or material weaknesses in the design or operation of internal controls and any fraud that involves management or other employees with a significant role in internal controls.
Review expense accounts of senior executives.
Review and discuss with management the Company's cybersecurity and other information technology risks, controls and procedures.
Review and assess with the Company's General Counsel any legal and regulatory matters that may have a material impact on the Company's financial statements.
Prepare the Audit Committee Report.
Oversee management’s arrangements for the prevention, deterrence and detection of fraud and for management’s responses to allegations of fraud.
Review this Charter at least annually and make recommendations to the Nominating and Governance Committee for approval and adoption of the Charter, including any additions, deletions or modifications, as may be deemed appropriate.
Perform such additional activities and consider such other matters, within the scope of its responsibilities, as the Committee or the Board deems necessary or appropriate.