Charter of the Audit Committee of the Board of Directors


The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its oversight responsibilities relating to: the auditing and accounting practices of the Company; the adequacy and integrity of the Company's systems of internal controls and financial reporting processes; and the reliability of the Company's financial reports to the public. The Committee's primary duties and responsibilities are to:

§     Serve as an independent and objective party to monitor the Company’s financial reporting process and internal control system.

§     Review and appraise the activities of the internal and external auditors.

§     Provide an open avenue of communication among the external and internal auditors, financial and senior management, and the Board of Directors.

The Committee is responsible for producing the 'Report of the Audit Committee' required by the rules of the Securities and Exchange Commission (the "SEC") to be included in the Company's annual proxy statement and overseeing the activities of the external auditors. The external auditors are ultimately accountable to the Audit Committee and Board of Directors as representatives of the stockholders. The internal auditors and external auditors report directly to the Committee. The Chief Compliance Officer reports to this Committee and to the Human Resources/Corporate Governance Committee.

The Committee will primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV of this Charter.


1.  The Committee shall be comprised solely of at least three independent directors appointed annually by the Board upon nomination by the Corporate Governance and Nominating Committee.  Members of the Committee will be considered independent if they meet the criteria for independence required by NASDAQ and section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations of the SEC.  Each member of the Committee shall be able to read and understand financial statements.  At least one member of the Committee shall be a financial expert as defined by the SEC.  Committee members may be replaced at the discretion of the Board.

2.  The Committee has the sole authority to retain independent counsel and other advisors at the expense of the Company and to approve fees and other retention terms of such advisors.

3.  The Committee may form and delegate authority to subcommittees when appropriate.


The Committee will meet at least four times annually, or more frequently as circumstances dictate in addition to the conference calls to discuss the financial statements prior to release of earnings where the Chairman or his designee may represent the entire Committee. The Committee Chairman reviews and approves the proposed agenda in advance of each meeting. The Committee will meet separately with the Chief Financial Officer, Chief Accounting Officer, Chief Compliance Officer, the internal auditors and the external auditors in executive sessions at least four times annually to discuss any matters that the Committee or each of these groups believes should be discussed privately. The Committee will also meet in executive session at each meeting.


In carrying out its responsibilities, the Committee believes that its policies and procedures should remain flexible in order to react to changing conditions and to ensure the effective oversight of the company's reporting process and internal control system. While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles ("GAAP"). This is the responsibility of management and the external auditor. Nor is it the duty of the Committee to conduct investigations or to assure compliance with laws and regulations and the Company's Code of Conduct.

Specific responsibilities and duties of the Committee:

Documents/Reports Review

1.  Obtain the full Board of Director’s approval of this Charter and evaluate it at least annually or as conditions dictate.

2.  Review the Company's annual financial statements and any reports or other publicly disclosed financial information as the Committee deems necessary.

3.  Review the quarterly financial results with management and the external auditor prior to the release of earnings.  The Chairman of the Committee or his designee may represent the entire Committee for purposes of this review.

4.  Review reports and written communications from the external auditor on:

§     All critical accounting policies and practices used.

§     All alternative treatments of financial information within GAAP that have been discussed with management, ramifications of the use of such treatments, and the treatments preferred by the external auditor.

§     Other material written communication between the external auditor and management such as any management letter or schedule of unadjusted differences.

5.  Review disclosures made to the Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and 10-Q about any significant deficiencies or material weaknesses in the design or operation of internal controls and any fraud involving management or other employees who have a significant role in the Company’s internal controls.

External Auditors

1.  Select, approve compensation for, and replace (if appropriate) the external auditor.  The Committee may request stockholder ratification of the external auditor’s appointment annually.

2.  Evaluate the independence and effectiveness of the external auditor.  Ensure receipt from the external auditor of a formal written statement delineating all relationships between the external auditor and the Company.  Ensure compliance with partner rotation requirements.

3.  Review and approve in advance the non-audit services to be performed by the external auditor.  Management and the independent auditor will each confirm to the Committee that each proposed non-audit service is permissible under applicable legal requirements.  The Committee will continue periodic review of specific projects and approval of actual expenditures to determine if these services could potentially affect independence.

4.  Annually review and approve the external auditor’s plan and scope of activities including any areas to which the Committee, management, the internal auditors, or the external auditor believe special attention should be directed.

Internal Auditors

1.  Review and evaluate the internal audit function including the independence and authority of its reporting obligations, its charter, budget and staffing, the proposed audit plans for the coming year, and coordination with the external auditor.

2.  Review summaries of findings from completed internal audits and management’s responses.

3.  Review internal audit’s assessment of the adequacy of the company’s internal controls including computerized information systems controls and security.

Financial Reporting Processes

1.  Review, in consultation with the external auditor, the results of the annual audit giving specific attention to the following:

·     Unusual, improper, or illegal transactions;

·     Material weaknesses in the internal control environment;

·     The external auditor’s judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting;

·     Changes in accounting, legal, or other regulatory requirements which will or could have a significant impact on the Company;

·     All proposed adjustments of the external auditor not recorded by the Company;

·     Any significant differences in the interpretation of GAAP between the Company and the external auditor as well as any areas where alternative applications of GAAP could have a material effect on the financial statements;

·     Any significant business or financial risks facing the Company;

·     Any significant difficulties encountered during the course of the audit including any restrictions on the scope of work or access to required information.

Ethical and Legal Compliance

1.  Review and assess management's monitoring of the Company's compliance with the Code of Conduct.  Review the results of the annual Business Ethics and Conflict of Interest Survey with management and the disposition of all instances of noncompliance.

2.  Review with the Company’s General Counsel any legal matter that could have a significant impact on the Company’s financial statements.

3.  Establish a process for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and for the confidential anonymous submission by employees of information regarding questionable accounting or auditing matters.


1.  Make regular reports to the Board.

2.  Review policies and procedures with respect to officers’ expense accounts including their use of company assets and consider the results of any review of these areas by the internal or external auditors.

3.  Review and approve all “related party transactions.”  “Related party transactions” are defined as any transaction, or series of similar transactions, between the Company (or any subsidiary) and (1) any director or corporate officer; (2) any nominee for director; (3) any person or entity known to hold more than 5% of Andrew stock; or (4) any immediate family member of any of the foregoing persons.

4.  Annually conduct a self-assessment of the Committee’s performance.

5.  Perform any other activities consistent with this Charter, the Company's by-laws, and governing law as the Committee or the Board deems necessary or appropriate.

Rev. 8/2/06