Audit Committee Charter of Nco Group Inc

                                   Appendix A
                                 NCO Group, Inc.
                             Audit Committee Charter
         There shall be a committee of the board of directors (the "Board") to
be known as the audit committee. The audit committee's purpose is to:
         (A) oversee the accounting and financial reporting processes of the
Company and the audits of the financial statements of the Company; and
         (B) prepare an audit committee report as required by the SEC's rules to
be included in the Company's annual proxy statements, or, if the Company does
not file a proxy statement, in the Company's annual report filed on Form 10-K
with the SEC.
         The audit committee shall have at least three (3) members, each of whom
must meet the following conditions: (i) be independent as defined under Rule
4200(a)(15) of The Nasdaq Stock Market (except as set forth in Rule 4350
(d)(2)(B)); (ii) meet the criteria for independence set forth in Rule
10A-3(b)(1) under the Securities Exchange Act of 1934 (subject to the exemptions
provided in Rule 10A-3(c)); (iii) 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; and (iv) be able to read and understand
fundamental financial statements, including a Company's balance sheet, income
statement, and cash flow statement. Additionally, the Company must certify that
it has, and will continue to have, at least one member of the audit committee
who has 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.
         The Board shall elect or appoint a chairperson of the audit committee
(or, if it does not do so, the audit committee members shall elect a chairperson
by vote of a majority of the full committee); the chairperson will have
authority to act on behalf of the audit committee between meetings.
                     Specific Responsibilities and Authority
         The specific responsibilities and authority of the audit committee
shall be as follows:
         (A) be directly responsible for the appointment, compensation,
retention and oversight of the work of any registered public accounting firm
engaged (including resolution of disagreements between management and the
auditor regarding financial reporting) for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for the
Company, and each such registered public accounting firm must report directly to
the audit committee.
         (B) 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 submissions
by Company employees of concerns regarding questionable accounting or auditing
         (C) have the authority to engage independent counsel and other
advisers, as it determines necessary to carry out its duties;
         (D) receive appropriate funding from the Company, as determined by the
audit committee in its capacity as a committee of the Board, for payment of: (i)
compensation to any registered public accounting firm engaged for the purpose of
preparing or issuing an audit report or performing other audit, review or attest
services for the Company; (ii) compensation to any advisers employed by the
audit committee; and (iii) ordinary administrative expenses of the audit
committee that are necessary or appropriate in carrying out its duties;
         (E) ensure its receipt from the outside auditors of a formal written
statement delineating all relationships between the auditor and the Company,
consistent with Independence Standards Board Standard 1, and actively engaging
in a dialogue with the auditor with respect to any disclosed relationships or
services that may impact the objectivity and independence of the auditor and for
taking, or recommending that the full Board take, appropriate action to oversee
the independence of the outside auditor;
         (F) at least annually, obtain and review a report by the independent
auditor describing: the firm's internal quality-control procedures; any material
issues raised by the most recent internal quality-control review, or peer
review, of the firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the firm, and any steps taken to deal
with any such issues;
         (G) discuss the Company's annual audited financial statements and
quarterly financial statements with management and the independent auditor,
including the Company's disclosures under "Management's Discussion and Analysis
of Financial Condition and Results of Operations;"
         (H) discuss the Company's earnings press releases, as well as financial
information and earnings guidance provided to analysts and rating agencies;
         (I) discuss policies with respect to risk assessment and risk
         (J) meet separately, periodically, with management, with any internal
auditors (or any other personnel responsible for the internal audit function)
and with independent auditors;
         (K) review with the independent auditor any audit problems or
difficulties and management's response, including discussion of the
responsibilities, budget and staffing of the Company's internal control
         (L) set clear hiring policies for employees or former employees of the
independent auditors;
         (M) report regularly to the Board;
         (N) make an annual performance evaluation of the audit committee;
         (O) review and reassess the adequacy of the audit committee's charter
         (P) comply with all preapproval requirements of Section 10A(i) of the
Securities Exchange Act of 1934 and all SEC rules relating to the administration
by the audit committee of the auditor engagement to the extent necessary to
maintain the independence of the auditor as set forth in 17 CFR Part
         (Q) make such other recommendations to the Board on such matters,
within the scope of its function, as may come to its attention and which in its
discretion warrant consideration by the Board; and
         (R) act as a qualified legal compliance committee as defined in 17 CFR
Part 205.2.
                                General Comments
         While the fundamental responsibility for the Company's financial
statements and disclosures rests with management and the independent auditor,
the audit committee will review (A) major issues regarding accounting principles
and financial statement presentations, including any significant changes in the
Company's selection or application of accounting principles, and major issues as
to the adequacy of the Company's internal controls and any special audit steps
adopted in light of material control deficiencies; (B) analyses prepared by
management and/or the independent auditor setting forth significant financial
reporting issues and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of alternative generally
accepted accounting principle ("GAAP") methods on the financial statements; (C)
the effect of regulatory and accounting initiatives, as well as off-balance
sheet structures, on the financial statements of the Company; and (D) the type
and presentation of information to be included in earnings press releases
(paying particular attention to any use of "pro forma," or "adjusted" non-GAAP,
information), as well as review any financial information and earnings guidance
provided to analysts and rating agencies.
         The audit committee shall meet at least four times per year on a
quarterly basis, or more frequently as circumstances require. One or more
meetings may be conducted in whole or in part by telephone conference call or
similar means if it is impracticable to obtain the personal presence of each
audit committee member. The Company shall make available to the audit committee,
at its meetings and otherwise, such individuals and entities as may be
designated from time to time by the audit committee, such as members of
management including (but not limited to) the internal audit and accounting
staff, the independent auditors, inside and outside counsel, and other
individuals or entities (whether or not employed by the Company and including
any corporate governance employees and individuals or entities performing
internal audit services as independent contractors).
         Any duties and responsibilities of the audit committee, including, but
not limited to, the authority to preapprove all audit and permitted non-audit
services, may be delegated to one or more members of the audit committee or a
subcommittee of the audit committee.
         The audit committee is responsible for the duties and responsibilities
set forth in this charter, but its role is oversight and therefore it is not
responsible for either the preparation of the Company's financial statements or
the auditing of the Company's financial statements. The members of the audit
committee are not employees of the Company and may not be accountants or
auditors by profession or experts in accounting or auditing. Management has the
responsibility for preparing the financial statements and implementing internal
controls and the independent auditors have the responsibility for auditing the
financial statements and monitoring the effectiveness of the internal controls,
subject, in each case, to the oversight of the audit committee described in this
charter. The review of the financial statements by the audit committee is not of
the same character or quality as the audit performed by the independent
auditors. The oversight exercised by the audit committee is not a guarantee that
the financial statements will be free from mistake or fraud. In carrying out its
responsibilities, the audit committee believes its policies and procedures
should remain flexible in order to best react to a changing environment.
Date of Adoption: February 5, 2004