Audit Committee Charter Of
CDW Corporation

 

Purpose

The Audit Committee (the "Committee") is appointed by the Board of Directors to assist the Board in fulfilling its oversight responsibilities. The Committee's primary duties and responsibilities are to:

Monitor the integrity of the Company's financial reporting process and systems of internal controls regarding finance, accounting, and legal compliance.

Monitor the independence and performance of the Company's independent auditor (the "Independent Auditor").

Direct the scope and monitor the performance of the Company's Business Process Assurance department (internal audit).

Provide an avenue of communication among the Independent Auditor, management, the Business Process Assurance department, and the Board of Directors.


While the Committee has been given certain duties and responsibilities pursuant to this Charter, the Committee is not responsible for guaranteeing the accuracy of the Company's financial statements or the quality of the Company's accounting practices. The fundamental responsibility for the Company's financial statements and disclosures rests with management and the Independent Auditor. To the extent that procedures included in this Charter go beyond what is required of an audit committee by existing law and regulation, such procedures are meant to serve as guidelines rather than inflexible rules and the Committee is encouraged to adopt such different or additional procedures as it deems necessary from time to time.

Composition of Committee

The Committee shall be comprised of three or more directors, each of whom (i) meets the independence requirements of The NASDAQ Stock Market, Inc. ("NASDAQ"), and (ii) otherwise satisfies the applicable requirements for audit committee service imposed by the Securities Exchange Act of 1934, as amended (the "Act") or NASDAQ, provided that the Board may elect to take advantage of any exception from such requirements provided in NASDAQ rules. One member of the Committee shall be a "financial expert," as such term is defined by the Securities and Exchange Commission (the "SEC"). Determination as to whether a particular director satisfies the requirements for membership on the Committee shall be made by the Board.

Committee members shall be appointed by the Board and shall serve for such terms as the Board may determine, or until their earlier resignation, death or removal by the Board. If a Committee Chair is not designated or present, the members of the Committee may designate a Chair by majority vote of the Committee membership.

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Meetings

The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board. The Committee is authorized and empowered to adopt its own rules of procedure not inconsistent with (i) any provision of this Charter, (ii) any provision of the Bylaws of the Company or (iii) the laws of the state of
Illinois. The Committee will maintain copies of minutes of each meeting of the Committee, and each written consent to action taken without a meeting, reflecting the actions so authorized or taken by the Committee. A copy of the minutes of each meeting and all consents will be placed in the Company's minute book.

The Committee shall hold at least four regularly scheduled quarterly meetings and meet more frequently as circumstances dictate. The Committee should meet regularly in executive session with management, the manager of Business Process Assurance, the Independent Auditor, and as a committee to discuss any matters that the Committee or each of these groups believe should be discussed. In addition, the Committee, or at least its Chair, will communicate with management and the Independent Auditor quarterly to review the Company's financial statements and significant findings based upon the auditors' limited review procedures prior to public release of information.

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Authority

The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the Independent Auditor as well as anyone in the organization. The Committee will have the resources and authority necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants, as it deems appropriate. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company and the Committee will take all necessary steps to preserve the privileged nature of those communications. The Committee may form, and delegate authority to, subcommittees when it deems appropriate.

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Duties and Responsibilities

The Committee shall:

Review Procedures

1.

Submit this Charter to the Board of Directors for approval and have the document published at least every three years in accordance with SEC regulations.

2.

Review and reassess the adequacy of this Charter at least annually.

3.

Review and discuss the Company's annual audited financial statements and year-end earnings release with management and the Independent Auditor prior to filing or distribution. The Committee shall make a recommendation to the Board as to whether the annual audited financial statements should be included in the Company's Annual Report on Form 10-K.

4.

Review with management and the Independent Auditor the company's quarterly financial results prior to the release of earnings. If practicable, the Chairman of the Committee will review the company's quarterly financial statements prior to filing.

5.

In consultation with management, the Independent Auditor, and the Business Process Assurance department, consider the integrity of the Company's financial reporting processes and controls. Discuss significant financial risk exposures and the steps management has taken to monitor, control, and report such exposures.

6.

Review with the Independent Auditor, Business Process Assurance department, and management the extent to which any previously-approved changes or improvements in financial or accounting practices and internal controls have been implemented.

7.

Review the Investment Policy of the Company and approve any changes thereto. Report to the Board of Directors on any significant changes.

 

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Independent Auditor

8.

Have the sole authority to appoint, determine funding for, and oversee the Independent Auditor. The Committee shall be responsible for the resolution of disagreements between management and the Independent Auditor regarding financial reporting. The Independent Auditor shall report directly to the Committee. The Committee shall be responsible for evaluating the competence, performance and independence of the Independent Auditor.

9.

Be responsible for the preapproval of all audit services and permissible non-audit services to be provided to the Company by the Independent Auditor, subject to any exceptions provided in the Act. The Committee may delegate to one or more of its members the authority to grant such preapprovals, provided that any such decision of such member or members must be presented to the full Committee at its next scheduled meeting.

10.

Obtain and review annually in connection with the Independent Auditor's annual audit of the Company's year-end financial statements (the "Annual Audit"), a report from the Independent Auditor, describing (a) all critical accounting policies and practices to be used in the Annual Audit, (b) all alternative treatments within generally accepted accounting principles for policies and practices related to material items that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the Independent Auditor, and (c) other material written communications between the Independent Auditor and management, such as any management letter or schedule of unadjusted differences. Discuss with the Independent Auditor any material issues raised in such report.

11.

Review and discuss with the Independent Auditor all significant relationships which the auditor and its affiliates have with the Company and its affiliates in order to determine the Independent Auditor's independence, including: (i) requesting, receiving and reviewing, on a periodic basis, a formal written statement delineating all relationships which may reasonably be thought to bear on the independence of the Independent Auditor with respect to the Company, including the matters set forth in Independence Standards Board No.1; (ii) discussing with the Independent Auditor any disclosed relationships or services that may impact the objectivity and independence of the Independent Auditor; and (iii) taking appropriate action to oversee the independence of the Independent Auditor.

12.

Review and approve the Independent Auditor's audit plan and engagement letter - discuss scope, staffing, locations, reliance upon management, and Business Process Assurance audits and general audit approach.

13.

Assure the regular rotation of the lead audit partner, the concurring partner and other audit partners engaged in the Annual Audit, to the extent required by law.

14.

Discuss with the Independent Auditor the Independent Auditor's judgment about the quality, not just the acceptability, of the accounting principles applied in the Company's financial reporting.

15.

Review with the Independent Auditor any audit problems or difficulties and management's response.

 

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Business Process Assurance Department and Legal Compliance

16.

Direct and approve the budget, plan, changes in plan, activities, organizational structure, and qualifications of the Business Process Assurance department including with respect to any outside auditors, counsel, experts or consultants utilized by the Business Process Assurance department. The Business Process Assurance department shall have a direct reporting responsibility to the Board of Directors through the Committee.

17.

Review the appointment and performance of the senior Business Process Assurance executive.

18.

Review significant reports prepared by the Business Process Assurance department together with management's response and follow-up to these reports.

19.

On at 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.

 

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Other Responsibilities

20.

Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. Review periodically with management and Business Process Assurance these procedures and any significant complaints received.

21.

Annually prepare a report to shareholders as required by SEC regulations. The report should be included in the Company's annual proxy statement.

22.

Report regularly to the full board, both with respect to the activities of the Committee generally and with respect to any issues that arise regarding the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the Independent Auditor or the performance of the Business Process Assurance department.

23.

Annually review financial and accounting personnel succession planning within the Company.

24.

Be responsible for the review of all related-party transactions, as such term is defined in applicable regulations of the NASDAQ and the SEC. No such related party transaction may be entered into unless and until it has been approved by the Committee.

25.

Serve, if the Board directs it do so, as a Qualified Legal Compliance Committee, as such term is defined in SEC regulations.

26.

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.