2003 Audit Charter: ATALLTEL CORPORATION
AUDIT COMMITTEE OF BOARD OF DIRECTORS
AMENDED AND RESTATED AUDIT COMMITTEE CHARTER
(as adopted effective January 23, 2003)
The Audit Committee (the "Committee") of the Board of Directors of ALLTEL Corporation ("ALLTEL") shall be appointed by the Board of Directors and shall consist of at least three directors, each of whom must satisfy any criteria imposed on members of the Committee that are specified in the New York Stock Exchange ("NYSE") Rules, the rules of the Securities and Exchange Commission (the "SEC"), and any other statute or regulation applicable to ALLTEL from time to time.
Statement of Policy
The Committee shall provide assistance to the Board of Directors in fulfilling its oversight responsibility related to ALLTEL's financial statements and financial reporting process, systems of internal accounting and financial controls, independent auditors' engagement and qualifications, internal audit function, the annual independent audit of ALLTEL's financial statements, and legal compliance and ethics programs as established by the ALLTEL management and the Board of Directors. In so doing, the Committee shall be responsible for maintaining free and open communication among the Committee, ALLTEL's independent auditors, internal auditors, and the ALLTEL management. In discharging its responsibilities, the Committee is empowered to investigate any matter with full access to all books, records, facilities, and personnel of ALLTEL and the power to engage independent counsel and other advisors that the Committee determines necessary to discharge its duties and responsibilities. The Committee shall be entitled to obligate ALLTEL to pay the fees and expenses of independent auditors for rendering or issuing an audit report and of any outside professionals engaged by the Committee in accordance with this charter.
Responsibilities and Processes
The primary responsibility of the Committee is to oversee ALLTEL's financial reporting process on behalf of the Board of Directors and report the results of these activities to the Board of Directors. The ALLTEL management is responsible for preparing ALLTEL's financial statements, and ALLTEL's independent auditors are responsible for auditing those financial statements. The Committee believes its policies and procedures in carrying out its responsibilities should be flexible in order to best respond to changing conditions and circumstances.
The principal recurring processes of the Committee in carrying out its oversight responsibilities are set forth below:
The Committee shall maintain a clear understanding with ALLTEL's management and ALLTEL's independent auditors that the independent auditors engaged to prepare or issue an audit report on the financial statements of ALLTEL are accountable to the Committee. The Committee shall be directly responsible for the appointment, compensation, oversight, and replacement of the independent auditors.
The Committee shall, no less frequently than annually, review and approve the engagement of the independent auditors to audit the annual consolidated financial statements of ALLTEL. To the extent required by law, the Committee shall approve in advance all services to be performed by the independent auditors, except that the Committee may delegate the authority to grant the pre-approval of non-audit services to one or more of its members, whose decision related to any such pre-approval shall be presented to the Committee at its next meeting.
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The Committee shall ensure that ALLTEL's independent auditors submit to the Committee, on a periodic basis, a formal written statement delineating all relationships between the independent auditors and ALLTEL. The Committee shall set clear policies for the hiring by ALLTEL of employees or former employees of the independent auditors. The Committee also shall actively engage in a dialogue with the independent auditors with respect to any disclosed relationships or services that may affect the objectivity and independence of the independent auditors and shall take appropriate action in response to the independent auditors' report to satisfy itself of the independent auditors' independence.
The Committee shall discuss with ALLTEL's internal auditors and ALLTEL's independent auditors the overall scope and plans for their respective audits, including the adequacy of resources dedicated to those audits. The Committee also shall discuss with ALLTEL's management, internal auditors, and independent auditors the adequacy and effectiveness of ALLTEL's accounting and financial controls, including the policies to assess and manage business risk, and ALLTEL's legal and ethical compliance programs. The Committee shall meet separately with ALLTEL's internal auditors and independent auditors, both with and without ALLTEL management present, to discuss the results of the auditors' examinations, including any audit problems and difficulties and management's response.
The Committee shall review ALLTEL's interim financial statements with ALLTEL's management and independent auditors prior to the filing of ALLTEL's Quarterly Report on Form 10-Q. The Committee shall discuss the results of the quarterly review and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards, the federal securities laws, and the requirements of the NYSE
The Committee shall review with ALLTEL's management and independent auditors the financial statements to be included in ALLTEL's Annual Report on Form 10-K (or the annual report to stockholders if distributed prior to the filing of Form 10-K), including the independent auditors' judgment about the quality, not just acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements. The Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by ALLTEL's independent auditors under generally accepted auditing standards, the federal securities laws, and the requirements of the NYSE and of the SEC. The Committee also shall approve the annual audited financial statements and recommend to the Board of Directors whether those financial statements should be included in ALLTEL's Annual Report on Form 10-K.
The Committee shall discuss with the ALLTEL management and the independent auditors ALLTEL's policy for earnings press releases, as well as for guidance and other financial information provided to analysts, rating agencies, and other constituencies in the investment community.
The Committee shall establish procedures for the receipt, retention, and treatment of complaints received by ALLTEL regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by ALLTEL employees of concerns regarding questionable accounting or auditing matters.
In connection with each Form 10-Q and Form 10-K report, the Committee shall discuss with the ALLTEL management and the independent auditors the most recent evaluation of ALLTEL's disclosure controls and procedures and any assessment or attestation of ALLTEL's internal controls that is required to be disclosed in each such periodic report.
On an annual basis, the Committee shall obtain and review a report from the independent auditors regarding the independent auditors' internal quality-control procedures; any material issues raised by the most recent internal quality-control review (or peer 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 the firm; and any steps taken to deal with any such issues.
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The Committee shall issue annually any Committee report regarding the audited financial statements of ALLTEL and the independent auditors that is required by the rules of the SEC to be included in ALLTEL's proxy statement.
The Committee shall review with the Board of Directors any issues that arise with respect to the quality or integrity of ALLTEL's financial statements, ALLTEL's compliance with legal or regulatory requirements, the performance and independence of ALLTEL's independent auditors, or the performance of the internal audit function.
The Committee shall review and reassess, at least annually, this charter, the performance of the Committee and obtain the approval of the Board of Directors to any changes to this charter or the Committee determined appropriate by the Committee.
The Committee shall undertake all further actions and discharge all further responsibilities imposed upon the Committee from time to time by applicable rules of the SEC and the NYSE and any other statute or regulation applicable to ALLTEL from time to time.