2003 Audit Charter: BSET

BASSETT FURNITURE INDUSTRIES, INC.
AUDIT COMMITTEE CHARTER
JUNE 25, 2002

The Audit Committee's primary functions are to monitor and to review on
behalf of the Board of Directors the Corporation's financial reports and
financial reporting structure; internal control structure regarding finance,
accounting and financial reporting; external audit and scope of other work by
the Corporation's independent auditors; and compliance with law. The Audit
Committee (the "Committee") reports to the full Board of Directors on all
matters within the Committee's responsibilities. The Committee will not infringe
on and does not undertake to supervise or control activities and functions
properly belonging to the senior management of the Corporation in the normal
operations of the Corporation.

The Committee shall be composed of no fewer than three directors, each of
whom shall be financially literate, and at least one of whom shall have
accounting or related financial management expertise, in each case as required
from time to time by the audit committee standards of NASDAQ. The Board of
Directors shall interpret these requirements and determine such qualifications
of Committee members in its business judgment. Furthermore, the Committee shall
be composed entirely of directors who are independent within the meaning of the
audit committee independence standards of NASDAQ, as determined by the Board of
Directors. The Committee shall review and reassess the adequacy of its charter
annually. The Committee shall cause to be provided to NASDAQ such appropriate
written confirmation concerning these matters as NASDAQ may from time to time
require.

The independent auditors shall be ultimately accountable to the Committee
and the Board of Directors on all matters pertaining to their engagement, and
the independent auditors shall report to the Committee as the Board of
Directors' representative. The Committee shall encourage open communication
among the Committee, independent auditors, internal audit and the Corporation's
management regarding matters within the Committee's responsibilities. The
Committee shall establish a calendar incorporating regular reporting items it
requires from independent auditors and the senior management during the fiscal
year.

To carry out the Committee's responsibilities:

1. The Committee, as the Board of Directors' representative, has the
authority and responsibility to evaluate and recommend to the Board of
Directors the appointment of (and, where appropriate, the replacement
of) the independent auditors. The Committee shall require the
independent auditors to submit periodically a formal written statement
delineating all relationships between the independent auditors and the
Corporation, including audit and non-audit assignments and the fees
and any other compensation paid to the independent auditors therefor.
The Committee is responsible for actively engaging in a dialogue with
the independent auditors with respect to any disclosed relationships
or services that may impact the objectivity or independence of the
independent auditors, and for recommending that the Board of Directors
take appropriate action in response to the independent auditors'
report to satisfy itself of their independence.

2. The Committee will meet with the independent auditors and the
Corporation's senior management to review the scope and methodology of
the proposed audits for each fiscal year. The independent auditors
shall provide regular reports to the Committee during the fiscal year
on the underlying process and status of their audits and any findings
or preliminary conclusions that have been reached. At least annually,
the independent auditors and senior management will review with the
Committee any audits of and recommendations relating to employee
benefit plans.

3. The Committee shall discuss and review with senior management and
approve annually the internal audit plan; including the basis for
audit risk assessment, the schedule for receipt and review of internal
audit reports, and evaluation of internal audit findings and
recommendations to senior management. Throughout the fiscal year,
internal audit shall report to senior management. Internal audit or
senior management will convey internal audit reports to the Committee.

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4. Senior management and the independent auditors shall review with the
Committee the Corporation's annual financial statements, and, prior to
filing with the Securities and Exchange Commission, drafts of the
Corporations Quarterly Reports on Form 10-Q. Quarterly, the
independent auditors shall provide to the Committee a review letter as
contemplated by Statement on Auditing Standards No. 71. During each
fiscal year, the independent auditors shall review with the Committee
their assessment as to the adequacy of the Corporation's structure of
internal controls over financial accounting and reporting, and their
qualitative judgments as to accounting principles employed and related
disclosures by the Corporation and the conclusions expressed in the
Corporation's financial reports. The independent auditors shall review
with the Committee significant judgments made by senior management in
the preparation of the financial statements. The Committee will review
in detail reports of examination issued by federal and state
regulatory agencies as well as the Corporations' responses thereto.

5. The independent auditors shall promptly identify to the Committee any
areas of disagreement with senior management in the preparation of
financial statements.

6. The independent auditors and senior management, including general
counsel, shall identify to the Committee significant business,
financial or legal issues that may significantly impact the
Corporation's financial statements and internal control systems.
During each fiscal year, senior management, including general counsel,
shall report to the Committee as to all significant litigation,
threatened litigation or potential litigation in which the Corporation
and its subsidiaries are or may be engaged, as well as the anticipated
or potential impact of such litigation, threatened litigation or
potential litigation on the Corporation.

7. During each fiscal year, senior management shall review with the
Committee the Corporation's monitoring efforts and procedures to
ensure compliance with laws and governmental regulations. Senior
management shall provide such information to the Committee as is
reasonably required to keep the Committee current on changes in
accounting standards and securities regulations affecting the
Corporation, as well as material developments in the home furnishings
industry generally and the promulgation of regulations materially
affecting the home furnishings industry.

8. If the occasion arises, senior management will report as soon as
possible to the Committee any material violation of laws or
governmental regulations. The Committee has the authority to
investigate any matter brought to its attention within the scope of
its duties and to retain independent legal counsel, at its discretion
and without permission from the Board of Directors or management.

9. The Committee shall hold at least four meetings each fiscal year. The
Chairperson of the Committee has authority to call Committee meetings,
to preside at such meetings and to make assignments to Committee
members. The Committee will evaluate findings and recommendations of
the independent auditors and internal audit, and make recommendations
as warranted to the Board of Directors.

10. At every meeting of the Committee where the independent auditors are
present, the independent auditors shall for at least a portion of such
meeting meet with the Committee without members of management or
internal audit present.

11. Senior management shall report all related party transactions to the
Committee, and the Committee shall be responsible for the review and
oversight contemplated by NASDAQ with respect to any such reported
transactions.

12. The Corporation shall provide the Committee such support, including
access to and use of the Corporation's records, physical properties,
management, staff, independent auditors, attorneys and consultants, as
the Committee deems necessary to discharge its responsibilities.