CHARTER OF THE AUDIT COMMITTEE
5 Pages
English

CHARTER OF THE AUDIT COMMITTEE

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CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF PRESCIENT APPLIED INTELLIGENCE (Amended and restated as of February 8, 2006) I. MEMBERSHIP The Audit Committee (“Committee”) shall be comprised of three or more independent directors elected by the Board of Directors (“Board”) of Prescient Applied Intelligence (“Company”) for a one-year term, all of whom (except as otherwise permitted) shall meet the requirements of independence as set forth in the Sarbanes-Oxley Act of 2002 and applicable Rules promulgated from time to time by the Securities and Exchange Commission (said Act and Rules collectively referred to as “Legal Requirements”). The Chairman, if any, of the Committee shall be appointed by the Board. In addition to the Legal Requirements, all members of the Committee shall have a working familiarity with basic finance and accounting practices, and at least one member of the Committee shall have accounting or related financial management expertise. II. PURPOSE The Committee shall provide assistance to the Board in fulfilling their responsibility to the stockholders, potential stockholders, and investment community relating to corporate accounting, reporting practices of the Company and the quality and integrity of the financial reports of the Company. The Committee’s primary duties and responsibilities are to: Oversee that management has maintained the reliability and integrity of the accounting policies and financial ...

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CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF PRESCIENT APPLIED INTELLIGENCE (Amended and restated as of February 8, 2006) I.MEMBERSHIPThe Audit Committee (“Committee”) shall be comprised of three or more independent directors elected by the Board of Directors (“Board”) of Prescient Applied Intelligence (“Company”) for a one-year term, all of whom (except as otherwise permitted) shall meet the requirements of independence as set forth in the Sarbanes-Oxley Act of 2002 and applicable Rules promulgated from time to time by the Securities and Exchange Commission (said Act and Rules collectively referred to as “Legal Requirements”).The Chairman, if any, of the Committee shall be appointed by the Board. In addition to the Legal Requirements, all members of the Committee shall have a working familiarity with basic finance and accounting practices, and at least one member of the Committee shall have accounting or related financial management expertise. II.PURPOSEThe Committee shall provide assistance to the Board in fulfilling their responsibility to the stockholders, potential stockholders, and investment community relating to corporate accounting, reporting practices of the Company and the quality and integrity of the financial reports of the Company.The Committee’s primary duties and responsibilities are to: fOversee that management has maintained the reliability and integrity of the accounting policies and financial reporting and disclosure practices of the Company. fOversee that management has established and maintained processes to assure that an adequate system of internal control is functioning within the Company. fOversee that management has established and maintained processes to assure compliance by the Company with all applicable laws, regulations and corporate policy. The Committee will fulfill these responsibilities primarily by carrying out the activities enumerated in Section III of the Charter. III.RESPONSIBILITIES AND DUTIESTo fulfill its responsibilities and duties, the Committee shall: A. Retainand terminate the independent auditors of the Company. B. Onan annual basis, obtain a formal written statement from the independent auditors delineating all relationships between the auditors and the Company consistent with Independence Standards Board Standard 1 and the Legal Requirements, and review and discuss with the auditors all significant relationships the auditors have with the Company to determine the auditors’ independence.
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C. Haveauthority to approve all fees and terms of engagement of the independent registered public accounting firm and shall pre-approve, or adopt appropriate procedures to pre-approve, all audit and non-audit services to be provided by the independent registered public accounting firm. D. Reviewthe intended scope of the annual audit and the audit methods and principles being applied by the independent auditors and negotiate the fees charged by the independent auditors. E. Reviewthe performance of independent auditors and determine that the lead and concurring partners are rotated in accordance with applicable rules and regulations. F. Approveany proposed discharge of the independent auditors. G. Reviewand discuss the results of the audit with the independent auditors, the Board, and management of the Company. H. Reviewand discuss with the independent public accountants and management the Company’s significant accounting principles, policies and practices and any alternative treatments they have discussed. I. Inconjunction with the independent auditors, review the integrity of the Company’s financial reporting processes, both internal and external and review the independent auditors accounting control reports. J. Reviewthe annual financial statements and MD&A before their submission to the Board for approval. K. Reviewwith financial management and the independent auditors the Company’s quarterly financial results and press release prior to the release of earnings and/or the Company’s quarterly and annual financial statements prior to filing or distribution. Discussany significant changes to the Company’s accounting principles, significant changes to estimates and any items required to be communicated by the independent auditors in accordance with SAS 61 (see item J) and the Legal Requirements. TheCommittee will pre-review all filings with the SEC that have financial significance. L. Reviewall material written communications between the independent auditors and management including any management letter and any schedule of unadjusted differences. M. Discusscertain matters required to be communicated to the Audit Committee in accordance with AICPA Auditing Standards (SAS) No. 61 and the Legal Requirements, including:
1. Theauditors’ responsibility under Generally Accepted Auditing Standards; 2. Significantaccounting policies; 3. Managementjudgments and accounting estimates; 4. Significantaudit adjustments;
5. Otherinformation in documents containing audited financial statements;
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6. Disagreementswith management including accounting principles, scope of audit and disclosures; 7. Consultationwith other accountants by management, and 8. Difficultiesencountered in performing the audit. N. Onat least an annual basis, review with the Company’s counsel, any legal matters that could have a significant impact on the organization’s financial statements, the Company’s compliance with applicable laws and regulations and inquiries received from regulators or governmental agencies. O. Theindependent registered public accounting firm shall submit, at least annually, a report to the Audit Committee regarding (a) the auditor’s internal quality-control procedures and (b) any material issues raised by the most recent internal quality-control or peer review or by any inquiry or investigations by governmental or professional authorities within the preceding five years respecting one of more independent audits carried out by the audit firm, and any steps taken to deal with such issues.The independent registered public accounting firm shall also submit such a report to the Audit Committee promptly after any review, inquiry or investigation referred to in the preceding sentence. P. Establishprocedures for the receipt, retention and treatment of complaints received by the corporation regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by corporation employees of concerns regarding questionable accounting or auditing matters. Q. Conductor authorize investigation into any matters within the Committee’s scope of responsibilities with full access to all books, records, facilities and personnel of the company and direct access to independent public accountants.The committee has the authority to retain, at the Committee’s request, special legal, accounting or other consultants, experts or advisors it deems necessary in the performance of its duties. R. Onan annual basis, the audit committee will perform a self evaluation. S. Overseethe preparation of the annual report of the Audit Committee as required by the rules of the SEC. T. Onat least an annual basis update the Audit Committee charter. U. Nooffer of employment shall be made to nor discussed with an employee or former employee of the independent auditing firm without prior approval of the Audit Committee. IV.FREQUENCY AND TIMINGThe Committee will meet from time to time whenever appropriate in order to discharge the functions specified in this Charter.A majority of the Committee will constitute a quorum for the conduct of business.The Committee shall report regularly to the Board. V. MINUTES Minutes will be kept of each meeting of the Committee and will be provided to each member of the Board.
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AUDIT COMMITTEE MEETING CHECKLIST This checklist contemplates Committee chair leadership (with input from management and the independent auditors) in developing a detailed agenda for each meeting and in keeping lines of communications open among the Board, the auditors and the Committee members. This checklist is merely a list of suggested activities.It is not intended to be comprehensive or to contradict or modify the written charter of the Committee.
Review Annual Report on Form 10-K or 10-KSB and proxyX statement Review Quarterly Reports on Form 10-Q or 10-QSB Assess internal control environment, systems of internal controlsX and other factors affecting the integrity of published financial reports Evaluate new accounting and financial reporting requirementsX Evaluate status of significant accounting estimates and judgments (e.g., reserves) and special issues (e.g., major transactions, accounting changes or trends, use of financial derivative products, tax matters) Monitor compliance with any recommendations made in annual management letter Review procedures and their execution regarding unlawful politicalX contributions, bribes, unexplained/unaccounted for payments or off-book transactions, and payments in violation of applicable laws and standards of business Address other matters (e.g., adequacy of staffing, succession planning) Conduct executive session with management Review the intended scope of the annual audit by the independentX auditors Review results of annual audit (including requiredX communications) Review results of timely quarterly reviews (including required communications) Report on internal control weaknesses and otherX recommendations and management response Evaluate scope of interim reviews and annual audit and feesX Conduct required written communication and discussion of auditorX independence Address other matters (e.g., adequacy of financial staff, succession planning, matters raised under SAS 61) Conduct executive session with independent auditors Review content of, and compliance with, conflict of interest andX ethics policies (Legal Counsel) Evaluate litigation status/regulatory and other legal matters (Legal Counsel) Reassess the adequacy of the Committee charter and obtain BoardX approval Approve Committee meeting schedule and agenda for theX u cominear and confirm mutual exectations with manaement
X
X
X
X
X
X
X
X
X
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and the auditors Evaluate independent auditing performanceX Approve minutes of previous meeting Report significant matters to the Board Conduct executive session of committee members Conduct new member orientation and continuing education (e.g., accounting and financial topics) Approve independent auditors fees terms of engagement and pre-approve all non audit servicesX Review all material written communications between the independent auditors and management. Address other matters
X X
X X X X
X X X
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