Audit and Review Process and Results
The Audit Committee has a duty to receive, review and make any inquiry regarding the completeness, accuracy and presentation of the Company’s financial statements to ensure that the financial statements fairly present the financial position and risks of the organization and that they are prepared in accordance with generally accepted accounting principles. To accomplish this, the Audit Committee:
| a. | considers the scope and general extent of the external auditors’ review, including their engagement letter and major changes to the Company’s auditing and accounting principles and practices; |
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| b. | reviews the results of the independent audit and the quarterly reviews, and the independent auditor’s opinion on the audited financial statements; |
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| c. | consults with management and the external auditors regarding the sufficiency of the Company’s internal system of audit and financial controls, internal audit procedures and results of such audits; |
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| d. | ensures the external auditors have full, unrestricted access to required information and have the cooperation of management; |
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| e. | reviews with the external auditors the audit process and standards, as well as regulatory or Company-initiated changes in accounting practices and policies and the financial impact thereof, and selection or application of appropriate accounting principles; |
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| f. | reviews with the external auditors and, if necessary, legal counsel, any litigation, claim or contingency, including tax assessments, that could have a material effect upon the financial position of the Company and the manner in which these matters are being disclosed in the financial statements; |
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| g. | reviews the appropriateness and disclosure of any off-balance sheet matters; |
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| h. | reviews disclosure of related-party transactions; |
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| i. | receives and reviews with the external auditors, the external auditors’ audit report and the audited financial statements; |
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| j. | makes recommendations to the Board respecting approval of the audited financial statements; |
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| k. | meets with the external auditors separately from management to review the integrity of the Company’s financial reporting, including the clarity of financial disclosure and the degree of conservatism or aggressiveness of the accounting policies and estimates, any significant disagreements or difficulties in obtaining information, adequacy of internal controls over financial reporting, adequacy of disclosure controls and procedures, and the degree of compliance by the Company with prior recommendations of the external auditors; |
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| l. | directs management to implement such changes as the Audit Committee considers appropriate, subject to any required approvals of the Board arising out of the review; and |
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| m. | meets at least annually with the external auditors, independent of management, and reports to the Board on such meetings. |
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