Audit Committee Charter

Organization: [ORG]
Adopted by the Board of Directors: [DATE]
Last reviewed: [REVIEW_DATE]
Committee type: Standing committee of the Board
Authority: Bylaws §[X]; Board resolution dated [DATE]

Template notice. Public-company audit committees face SOX/NYSE/Nasdaq rules; nonprofits and private entities should scale. Confirm independence definitions, financial-expert requirements, and auditor oversight with counsel. Replace bracketed placeholders.

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1. Purpose

The Audit Committee (the “Committee”) assists the Board in oversight of:

1. Integrity of [ORG]’s financial statements and financial reporting processes;
2. Effectiveness of internal controls over financial reporting and key compliance controls;
3. Qualifications, independence, and performance of the independent auditor ([and internal audit function, if any]);
4. [ORG]’s processes for monitoring compliance with laws, regulations, and codes of ethics as they relate to financial and audit matters;
5. Whistleblower procedures for accounting and auditing complaints; and
6. Related-party transactions as delegated under the Related-Party Transactions Policy.

Management remains responsible for preparing financial statements and maintaining controls. Auditors remain responsible for their audit opinions. The Committee oversees; it does not re-perform management or audit work.

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2. Membership and Independence

• Size: [3–5] directors, appointed by the Board upon [GOVERNANCE COMMITTEE] recommendation.
• Chair: Designated by the Board; may not be the Board Chair unless [EXCEPTION RULES].
• Independence: Each member shall be independent of management under [ORG]’s independence standards and applicable law/listing rules.
• Financial literacy: All members must be financially literate. At least one member shall have accounting or related financial management expertise ([“audit committee financial expert” if applicable]).
• Term: [1–3] year renewable terms; staggered where practical.
• Removal: By Board action.

Members shall disclose relationships that could impair independence and recuse from matters as needed under the Conflict of Interest Policy.

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3. Meetings

The Committee meets at least [4] times per year, with authority to convene more often. Meetings may be held in person or by authenticated video. A majority of members constitutes quorum. The Committee may invite the CEO, CFO, Controller, General Counsel, independent auditor, internal audit, and others as appropriate.

The Committee shall meet in executive session with the independent auditor at least [ANNUALLY / QUARTERLY], and separately with management and internal audit as needed. Minutes are kept by [SECRETARY / DESIGNEE] and approved by the Committee; confidential segments follow the Executive Session Policy.

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4. Authority and Resources

The Committee is authorized to:

• Appoint, compensate, retain, and oversee the independent auditor (subject to any member/shareholder ratification [ORG] requires);
• Resolve disagreements between management and the auditor regarding financial reporting;
• Pre-approve audit and permitted non-audit services ([or adopt a pre-approval policy]);
• Engage independent counsel and advisers at [ORG] expense, with notice to the Board Chair for engagements above $[THRESHOLD];
• Require any officer or employee to meet with the Committee;
• Access all books, records, facilities, and portal materials relevant to its duties; and
• Delegate routine pre-approvals to the Chair, subject to ratification at the next meeting.

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5. Duties and Responsibilities

5.1 Financial reporting

• Review annual ([and interim, if any]) financial statements with management and the auditor before Board release or filing;
• Discuss critical accounting policies, significant estimates, unusual transactions, and alternative treatments debated with the auditor;
• Review earnings releases / public financial communications for [ORG] where applicable;
• Consider whether financial reports are clear, complete, and consistent with information known to the Committee.

5.2 Independent auditor

• Evaluate auditor qualifications, performance, and independence (including partner rotation requirements if applicable);
• Review the annual audit plan, risk areas, and materiality approach at a high level;
• Review audit results, management letter comments, and remediation status;
• Obtain written independence confirmations and discuss any relationships that could impair independence;
• Recommend retention or replacement to the Board.

5.3 Internal controls and internal audit

• Oversee management’s design and testing of internal controls; review significant deficiencies and material weaknesses;
• If [ORG] has internal audit: review charter, plan, staffing, and independence; receive reports and direct access without management filtering;
• If no internal audit: periodically consider whether risk profile warrants creating one or commissioning external control reviews.

5.4 Compliance, fraud risk, and cybersecurity (finance-adjacent)

• Review with management the major financial risk exposures and steps taken to monitor/control them;
• Oversee fraud risk assessments relevant to financial reporting;
• Receive briefings on cybersecurity incidents that could materially affect financial reporting or control environments;
• Coordinate with other committees to avoid gaps/duplication.

5.5 Whistleblower procedures

• Establish and oversee procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, and confidential anonymous submissions by employees of concerns regarding questionable accounting or auditing matters;
• Receive summaries of relevant reports under the Whistleblower Policy; direct independent investigations when warranted.

5.6 Related-party transactions

• Review and approve RPTs as assigned by the Related-Party Transactions Policy;
• Review the related-party registry and disclosure listings at least [ANNUALLY].

5.7 Tax and nonprofit-specific (include if applicable)

• For nonprofits: review Form [990] before filing as the Board delegates; monitor unrestricted/restricted resource reporting issues raised by auditors.

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6. Reporting to the Board

After each regular meeting, the Chair reports to the Board on key items, significant issues, and recommendations (auditor appointment, control weaknesses, RPTs, whistleblower trends of Board relevance). Annually, the Committee reviews this Charter and its own performance and recommends changes to the Board.

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7. Outside advisors and funding

[ORG] shall provide appropriate funding, as determined by the Committee, for payment of the independent auditor, advisers retained by the Committee, and ordinary administrative expenses.

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8. Limitation of role

While the Committee has the responsibilities set forth herein, it is not the Committee’s duty to plan or conduct audits, to determine that financial statements are complete and accurate, or to guarantee compliance. These are management and auditor responsibilities. Each member is entitled to rely on information from management, auditors, and advisers absent knowledge that makes reliance unwarranted.

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9. Charter review

This Charter is reviewed at least annually. Material amendments require Board approval. Next review: [NEXT_REVIEW_DATE].

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Appendix — Annual calendar (starter)