The Audit Committee of the Board of Directors of SOURCECORP, Incorporated ("Company") shall consist of at least three independent directors. Members of the Committee shall be considered independent if, in the opinion of the Board of Directors, they have no relationship to the Company that could interfere with the exercise of their independence from management and the Company. As determined by the Board of Directors, the Members of the Committee will be able to read and understand fundamental financial statements, including a company's balance sheet, income statement, and cash flow statement or will become able to do so within a reasonable period of time after his or her appointment to the Audit Committee. Additionally, at least one member of the Audit Committee must have past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in the individual's financial sophistication, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
In discharging its oversight role, the Audit Committee shall have the authority to retain special legal, accounting or other consultants to advise the Committee. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall meet as scheduled by the Chairperson selected by the Board of Directors as frequently as circumstances dictate.
Provide an avenue of communications between the independent auditors and the Board of Directors.
Recommend annually the appointment of the independent auditors to the Board for its approval.
Review the annual audited financial statements with management, including major issues regarding accounting and auditing principles and practices as well as the adequacy of internal controls that could significantly affect the Company's financial statements.
Review with management and the independent auditor the Company's quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditors' reviews of the quarterly financial statements.
Receive any notification from the independent auditor contemplated by Section 10A of the Securities Exchange Act of 1934 (i.e. illegal acts).
Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit.
Review any analysis prepared by management and the independent auditor of significant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including any analysis by them of the effect of alternative GAAP methods on the Company's financial statements.
Review with management and the independent auditor the effect of material regulatory and accounting initiatives on the Company's financial statements.
Review major changes to the Company's auditing and accounting principles and practices as suggested by the independent auditor, internal auditors or management.
Discuss with management insider or affiliated party transactions, if any.
Review with management and the independent auditor, as appropriate, the substance of any regulatory or governmental agency correspondence, employee complaints or published reports to the extent such correspondence, complaints or reports raise material issues regarding the Company's financial statements or accounting policies.
Discuss with management and its general counsel legal and regulatory matters likely to have a material impact on the Company's financial statements and Company compliance policies.
Review with the independent auditor any problems or difficulties the auditor may have encountered and any management letter provided by the auditor and the Company's response to that letter. Such review should include any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information, and any disagreements with management.
Review the appointment/replacement of the senior internal auditing executive and the internal audit department responsibilities, budget and staffing.
Review any significant reports to management prepared by the internal auditing department and management's responses.
Prepare a report, for inclusion in the Company's proxy statement, disclosing that the Committee reviewed and discussed the audited financial statements with management and discussed certain other matters with the independent auditors. Based upon these discussions, state in the report whether the Audit Committee recommended to the Board that the audited financial statements be included in the Annual Report.
Review and reassess the adequacy of the Audit Committee's charter annually. If any revisions therein are deemed necessary or appropriate, submit the same to the Board for its consideration and approval.
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations.
For the transaction of business at any meeting of the Audit Committee, two members shall constitute a quorum.