ASCENTIAL SOFTWARE CORPORATION

AUDIT COMMITTEE CHARTER

Purpose

      The purpose of the Audit Committee is to assist the Board of Directors’ oversight of the Company’s accounting and financial reporting processes and the audits of the Company’s financial statements.

Structure and Membership

      Number. The Audit Committee shall consist of at least three members of the Board of Directors.

      Independence. Except as otherwise permitted by the applicable NASDAQ rules, each member of the Audit Committee shall be independent as defined by NASDAQ rules, meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Exchange Act (subject to the exemptions provided in Rule 10A-3(c)), and not have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company at any time during the past three years.

      Financial Literacy. Each member of the Audit Committee must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement, and cash flow statement, at the time of his or her appointment to the Audit Committee. In addition, at least one member 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. Unless otherwise determined by the Board of Directors (in which case disclosure of such determination shall be made in the Company’s annual report filed with the SEC), at least one member of the Audit Committee shall be an “audit committee financial expert” (as defined by applicable SEC rules).

      Chair. Unless the Board of Directors elects a Chair of the Audit Committee, the Audit Committee shall elect a Chair by majority vote.

      Compensation. The compensation of Audit Committee members shall be as determined by the Board of Directors. No member of the Audit Committee may receive, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or any of its subsidiaries, other than fees paid in his or her capacity as a member of the Board of Directors or a committee of the Board.

      Selection and Removal. Members of the Audit Committee shall be appointed by the Board of Directors. The Board of Directors may remove members of the Audit Committee from such committee, with or without cause.

Authority and Responsibilities

      General

      The Audit Committee shall discharge its responsibilities, and shall assess the information provided by the Company’s management and the independent auditor, in accordance with its business judgment. Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements and for the appropriateness of the accounting principles and reporting policies that are used by the Company. The independent auditors are responsible for auditing the Company’s financial statements and for reviewing the Company’s unaudited interim financial statements. The authority and responsibilities set forth in this Charter do not reflect or create any duty or obligation of the Audit Committee to plan or conduct any audit, to determine or certify that the Company’s financial statements are complete, accurate, fairly presented, or in accordance with generally accepted accounting principles or applicable law, or to guarantee the independent auditor’s report.

Oversight of Independent Auditors

      Selection. The Audit Committee shall be solely and directly responsible for appointing, evaluating, retaining and, when necessary, terminating the engagement of the independent auditor. The Board of Directors, may, in its discretion, seek ratification by the stockholders of the engagement of the independent auditor.

      Independence. The Audit Committee shall take, or recommend that the full Board of Directors take, appropriate action to oversee the independence of the independent auditor. In connection with this responsibility, the Audit Committee shall obtain and review a formal written statement from the independent auditor describing all relationships between the auditor and the Company, including the disclosures required by Independence Standards Board Standard No. 1. The Audit Committee shall actively engage in dialogue with the auditor concerning any disclosed relationships or services that might impact the objectivity and independence of the auditor.

      Compensation. The Audit Committee shall have sole and direct responsibility for setting the compensation of the independent auditor. The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the compensation of the independent auditor established by the Audit Committee.

      Pre-approval of Services. The Audit Committee shall pre-approve all audit services to be provided to the Company, whether provided by the principal auditor or other firms, and all other services (review, attest and non-audit) to be provided to the Company by the independent auditor; provided, however, that de minimis non-audit services may instead be approved in accordance with applicable SEC rules.

      Oversight. The independent auditor shall report directly to the Audit Committee, and the Audit Committee shall have sole and direct responsibility for overseeing the work of the independent auditor, including resolution of disagreements between Company management and the independent auditor regarding financial reporting. In connection with its oversight role, the Audit Committee shall, from time to time as appropriate, receive and consider the reports required to be made by the independent auditor regarding:

 

 

 

 

• 

critical accounting policies and practices;

 

 

 

 

• 

alternative treatments within generally accepted accounting principles for policies and practices related to material items that have been discussed with Company management, including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditor; and

 

 

 

 

• 

other material written communications between the independent auditor and Company management.

Audited Financial Statements

      Review and Discussion. The Audit Committee shall review and discuss with the Company’s management and independent auditor the Company’s audited financial statements, including the matters about which Statement on Auditing Standards No. 61 (Codification of Statements on Auditing Standards, AU §380) requires discussion.

      Recommendation to Board Regarding Financial Statements. The Audit Committee shall consider whether it will recommend to the Board of Directors that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K.

      Audit Committee Report. The Audit Committee shall prepare an annual committee report for inclusion where necessary in the proxy statement of the Company relating to its annual meeting of security holders.

Review of Other Financial Disclosures

      Independent Auditor Review of Interim Financial Statements. The Audit Committee shall direct the independent auditor to use its best efforts to perform all reviews of interim financial information prior to disclosure by the Company of such information and to discuss promptly with the Audit Committee and the Chief Financial Officer any matters identified in connection with the auditor’s review of interim financial information which are required to be discussed by applicable auditing standards. The Audit Committee shall direct management to advise the Audit Committee in the event that the Company proposes to disclose interim financial information prior to completion of the independent auditor’s review of interim financial information.

Controls and Procedures

      Oversight. The Audit Committee shall coordinate the Board of Directors’ oversight of the Company’s internal control over financial reporting, disclosure controls and procedures and code of conduct. The Audit Committee shall receive and review the reports of the CEO and CFO required by Rule 13a-14 of the Exchange Act.

      Procedures for Complaints. The Audit Committee shall 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.

      Related-Party Transactions. The Audit Committee shall review all related party transactions on an ongoing basis, and all such transactions must be approved by the Audit Committee.

      Additional Powers. The Audit Committee shall have such other duties as may be delegated from time to time by the Board of Directors.

Procedures and Administration

      Meetings. The Audit Committee shall meet as often as it deems necessary in order to perform its responsibilities. The Audit Committee may also act by unanimous written consent in lieu of a meeting. The Audit Committee shall periodically meet separately with: (i) the independent auditor; (ii) Company management and (iii) any internal auditors employed by the Company The Audit Committee shall keep such records of its meetings as it shall deem appropriate.

      Subcommittees. The Audit Committee may form and delegate authority to one or more subcommittees (including a subcommittee consisting of a single member), as it deems appropriate from time to time under the circumstances. Any decision of a subcommittee to pre-approve audit, review, attest or non-audit services shall be presented to the full Audit Committee at its next scheduled meeting.

      Reports to Board. The Audit Committee shall report regularly to the Board of Directors.

      Charter. At least annually, the Audit Committee shall review and reassess the adequacy of this Charter and recommend any proposed changes to the Board of Directors for approval.

      Annual Self-Evaluation. At least annually, the Audit Committee shall evaluate its own performance.

      Independent Advisors. The Audit Committee is authorized, without further action by the Board of Directors, to engage such independent legal, accounting and other advisors as it deems necessary or appropriate to carry out its responsibilities. Such independent advisors may be the regular advisors to the Company. The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the compensation of such advisors as established by the Audit Committee.

      Investigations. The Audit Committee shall have the authority to conduct or authorize investigations into any matters within the scope of its responsibilities as it shall deem appropriate, including the authority to request any officer, employee or advisor of the Company to meet with the Audit Committee or any advisors engaged by the Audit Committee.

      Funding. The Audit Committee is empowered, without further action by the Board of Directors, to cause the Company to pay the ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

RESPONSIBILITIES

      The Audit Committee Responsibilities Checklist identifies specific responsibilities of the Committee in carrying out its oversight role. The responsibilities checklist will be updated annually to reflect changes in regulatory requirements, authoritative guidance, and evolving oversight practices. As the compendium of Committee responsibilities, the most recently updated responsibilities checklist will be considered to be an addendum to this charter.


AUDIT COMMITTEE RESPONSIBILITIES CHECKLIST

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WHEN PERFORMED

 

 

 

 

Audit Committee Meetings

 

 

 

 

 

 

 

 

 


 

 

 

 

Summer

 

Fall

 

Winter

 

Spring

 

A/N

 


1.

 

Perform such other functions as assigned by law, the Company’s charter or bylaws, or the Board of Directors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


2.

 

The Committee shall have the power to conduct or authorize investigations into any matters within the Committee’s scope of responsibilities. The Committee shall be empowered to retain independent counsel, accountants, or others to assist it in the conduct of any investigation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


3.

 

Meet four times per year or more frequently as needed. The Committee may ask members of management or others to attend the meeting and provide pertinent information as necessary.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


4.

 

The agenda for Committee meetings will be prepared in consultation between the Committee chair (with input from the Committee members), Finance management, and the public accounting firm

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 


5.

 

Provide an open avenue of communication between the internal auditors, if any, the public accounting firm, Finance management and the Board of Directors. The Committee shall report Committee actions to the Board of Directors with such recommendations as the Committee may deem appropriate.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


6.

 

Review and update the Audit Committee Responsibilities Checklist annually.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 


7.

 

Provide a report in the annual proxy that includes the Committee’s review and discussion of matters with management and the independent public accounting firm.

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 


8.

 

Include a copy of the Committee charter as an appendix to the proxy statement at least once every three years.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


9.

 

(a)  Appoint and approve the public accounting firm;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

(b)  Approve the compensation of the public accounting firm;

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

(c)  Pre-approve audit services and all other services to be provided by the public accounting firm, as required by applicable SEC rules; and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

(d)  Provide oversight of the public accounting firm.

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

 

 


10.

 

Confirm annually the independence of the public accounting firm, and quarterly review the firm’s non-audit services and related fees.

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WHEN PERFORMED

 

 

 

 

Audit Committee Meetings

 

 

 

 

 

 

 

 

 


 

 

 

 

Summer

 

Fall

 

Winter

 

Spring

 

A/N

 


11.

 

Verify the Committee consists of a minimum of three members who are “independent” and financially literate, including at least one member who has financial sophistication.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 


12.

 

Review the independence of each Committee member based on NASDAQ, SEC and other applicable rules and regulations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 


13.

 

Inquire of Finance management and the public accounting firm about significant risks or exposures and assess the steps management has taken to minimize such risk to the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


14.

 

Review with the public accounting firm and Finance management the audit scope and plan, and coordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the use of independent public accountants other than the appointed auditors of the Company.

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 


15.

 

Consider and review with the public accounting firm:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) The adequacy of the Company’s internal controls including computerized information system controls and security; and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

X

 

 

 

(b) Any related significant findings and recommendations of the independent public accountants and internal audit together with management’s responses thereto.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

X

 


16. 

 

Review with Finance management any significant changes to GAAP and/or Company policies or standards.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


17.

 

Review with Finance management and the public accounting firm at the completion of the annual audit:

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

X

 

 

 

(a) The Company’s annual financial statements and related footnotes;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) The public accounting firm’s audit of the financial statements and its report thereon;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c) Any significant changes required in the public accounting firm’s audit plan;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(d) Any serious difficulties or disputes with management encountered during the course of the audit; and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(e) Other matters related to the conduct of the audit that are to be communicated to the Committee under generally accepted auditing standards.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

WHEN PERFORMED

 

 

 

 

Audit Committee Meetings

 

 

 

 

 

 

 

 

 


 

 

 

 

Summer

 

Fall

 

Winter

 

Spring

 

A/N

 


18.

 

Consider whether to recommend to the Board that the audited financial statements be included in the Annual Report on Form 10-K

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 


19.

 

Review with Finance management and the public accounting firm at least annually the Company’s critical accounting policies.

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

X

 


20.

 

Review policies and procedures with respect to transactions between the Company and officers and directors, or affiliates of officers or directors, or transactions that are not a normal part of the Company’s business.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 


21.

 

The Chairman of the Audit Committee or the Audit Committee will participate in a telephonic meeting among Finance management and the public accounting firm prior to earnings release.

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

 

 


22.

 

Review the periodic reports of the Company with Finance management, and the public accounting firm prior to filing of the reports with the SEC.

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

 

 


23.

 

In connection with each periodic report of the Company, review

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

 

 

 

 

(a) Management’s disclosure to the Committee under Rule 13a-14 of the Exchange Act; and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) The contents of the Chief Executive Officer and the Chief Financial Officer certificates to be filed under Rule 13a-14 of the Exchange Act and Section 906 of the Sarbanes-Oxley Act.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


24.

 

Review filings (including interim reporting) with the SEC and other published documents containing the Company’s financial statements and consider whether the information contained in these documents is consistent with the information contained in the financial statements before it is filed with the SEC or other regulators.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


25.

 

Coordinate with the Board oversight of internal control over financial reporting, disclosure controls and procedures and code of conduct.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


26.

 

Monitor the appropriate standards adopted as a code of conduct or ethics for the Company. Review with Finance management and Legal the results of the review of the Company’s monitoring compliance with such standards and its compliance policies.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 

 

 

X

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WHEN PERFORMED

 

 

 

 

Audit Committee Meetings

 

 

 

 

 

 

 

 

 


 

 

 

 

Summer

 

Fall

 

Winter

 

Spring

 

A/N

 


27.

 

Establish procedures for (i) receipt, retention and treatment of complaints regarding accounting or auditing matters and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 


28.

 

Review legal and regulatory matters that may have a material impact on the financial statements, related Company compliance policies, and programs and reports received from regulators.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X

 


29.

 

Meet with the public accounting firm in executive session to discuss any matters that the Committee or the public accounting firm believe should be discussed privately with the Audit Committee.

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

 

 


30.

 

Meet with Finance management in executive sessions to discuss any matters that the Committee or Finance management believe should be discussed privately with the Audit Committee.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

X