DOC

kpmg

By Sandra Thompson,2014-05-16 22:26
19 views 0
kpmg

     (Effective 2/23/09)

    ARMSTRONG

    AUDIT COMMITTEE CHARTER

    I. Purpose

    1. The Audit Committee oversees the accounting, auditing, financial reporting and internal

    financial control matters of Armstrong.

2. The Committee monitors the integrity of the Company’s management, and its policies,

    legal compliance (in coordination with other committees), reporting practices and

    systems of internal controls regarding finance and accounting.

    3. The Committee is directly responsible for the appointment, compensation, retention and

    oversight of the work of the independent auditor, the internal audit firm, and any other

    registered public accountant engaged in auditing, audit-related, review or attest services.

4. The Committee monitors the qualifications and independence of the Company’s

    independent auditors and the performance of the internal auditing function and

    independent auditors.

5. The Committee provides one avenue of communication among the independent auditors,

    management, the internal auditing function, and the Board of Directors concerning

    accounting, auditing, financial reporting and controls.

    II. Authority

The Audit Committee receives its authority and its assignments from the Board of Directors,

    except in matters where its authority is derived by law or rules of the principal stock

    exchange(s) where the securities of the Company are listed (the “Exchange”). The

    Committee regularly reports to the Board. The Committee has ultimate authority and

    responsibility to select, appoint, compensate, evaluate and where appropriate, replace the

    independent auditors. The independent auditors are directly accountable to the Committee.

    The Committee has direct access to the independent auditors as well as access to anyone in

    the Company. The Committee may investigate any activity of the Company. The

    Committee has the ability to contractually bind the Company, commit the Company to pay

    for services, expenses, or other costs, and retain, at the Company’s expense, special legal,

    accounting or other consultants or experts, all as it deems necessary in the performance of its

    duties. The Company will provide appropriate funding, as determined by the Committee, for

    its expenses and for payment of compensation to auditing firms and other advisors it

    determines necessary to carry out its duties.

     1

    III. Composition

    1. Audit Committee members’ qualifications shall meet the requirements as may be set by

    the Board of Directors from time to time, plus all applicable legal and regulatory

    requirements, including those of the Exchange.

    2. The Audit Committee shall be comprised of at least three directors who each meet the

    independence standards prescribed by law, the Exchange, and the Board of Directors.

    These include being independent of management and operating executives, not being an

    affiliated person of the Company or any subsidiary, being free from any relationship that

    would interfere with the exercise of his or her independent judgment, and not directly or

    indirectly receiving any consulting, advisory or other compensatory fee from the

    company apart from compensation as a director. The prohibition on other compensatory

    fees includes indirect acceptance through payments to spouses or other family members

    and to entities in which the director is a partner, officer or holds a similar position, all as

    defined by law. The prohibition excludes amounts received from fixed retirement

    compensation for past service.

3. All members of the Committee shall be financially literate.

    4. At least one member of the Committee shall have accounting or related financial

    management expertise and other qualities, as defined by the Sarbanes-Oxley Act and the

    SEC, to be considered “an audit committee financial expert”.

    5. Audit Committee members and the Chair shall be recommended by the Nominating and

    Governance Committee and appointed by the Board of Directors. A member of the

    Committee may be removed by majority vote of the board. The terms of Committee

    members shall be arranged to maintain continuity to the extent practicable, consistent

    with the rotation process specified in the Company’s Corporate Governance Principles.

    IV. Meetings

    The Audit Committee shall meet at least five times per year (at least once each quarter) on a schedule adopted by the Committee and as many additional times as the Committee deems

    necessary. The Chairman of the Board, the Chair of the Committee or any two other

    members of the Committee may call a special meeting in the manner prescribed by the

    Bylaws of the Company for a special meeting of the board. The Committee Chair may

    request members of management, representatives of the independent auditors and other

    persons to be present at meetings. At least quarterly, the Committee shall meet privately

    with the Chief Financial Officer, the Chief Accounting Officer, the Director of Internal

    Auditing (or representatives of the firm providing such services), the independent auditors,

    and as a committee to discuss any matters that the Committee or any of these individuals

    believe should be discussed.

     2

    V. Minutes

Minutes of each meeting are to be prepared at the direction of the Committee Chair and sent

    to Committee members and all other directors. Copies are to be provided to the independent

    auditors, the Director of Internal Auditing (or representatives of the firm providing such

    services), the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting

    Officer and the General Counsel.

    VI. Scope of Responsibilities and Duties

A. Charter Review

    1. Review and reassess the adequacy of this charter each year. Submit the charter to the

    Board of Directors for approval and publish the document as required by law or

    Exchange rules.

B. Financial Reporting

    1. Review the Company’s annual audited financial statements and the documents containing

    such filings prior to filing or distribution. The review should include discussion with

    management and independent auditors of significant issues regarding accounting

    principles, practices, audit findings, disclosures, judgments and any other requirements

    under accounting standards and rules.

    2. In consultation with the management, the independent auditors and the internal auditors,

    consider the integrity of and risks to the Company’s financial reporting processes and

    controls. Discuss assessment of significant financial risk exposures. Review the steps

    management has taken to monitor, control, and report such exposures. Review

    significant findings prepared by the independent auditors and the internal auditing

    function together with management’s responses.

    3. Prior to issuing quarterly financial statements, review those statements and the related

    filings with financial management and the independent auditors and consider any items

    required to be communicated by the independent auditors in accordance with SAS 61.

    4. Prior to issuing quarterly earnings release, the Audit Committee will review with

    management the information being communicated to the public in the press release, as

    well as the financial information and earnings guidance provided to analysts and rating

    agencies.

     3

    C. Independent Auditors

1. Each year, review the independence and performance of the independent auditors and

    retain or discharge the independent auditors as circumstances warrant. Prescribe such

    policies and procedures as the Committee deems appropriate pertaining to relationships

    with the independent auditors, including clear hiring policies for employees and former

    employees of the independent auditors. An accounting firm may not perform any audit

    service for the Company if a CEO, CFO, Controller or chief accounting officer of the

    Company was employed by that firm and participated in any capacity in the audit of the

    Company during the one-year period preceding the date of initiation of the audit.

2. Approve the independent auditors’ engagement terms and fees for annual audit services

    as well as advance approval of all non-audit engagements with that firm. Any such

    approval of non-audit services by the independent auditor shall be disclosed in periodic

    reports as prescribed by law.

3. On at least an annual basis, review a formal, written statement from the independent

    auditors on such matters as are prescribed by the applicable requirements of the Public

    Accounting Oversight Board or the Exchange, including all relationships between the

    auditors and the Company or its management. Discuss with the independent auditors all

    significant relationships they have with the Company and their impact on the auditors’

    objectivity and independence, including non-audit services and the fees proposed and

    charged therefore. Take appropriate action in response to these matters to satisfy itself of

    the auditors’ independence.

4. Review the independent auditors audit plan; discuss scope, staffing, locations, reliance

    upon management and internal audit, and general audit approach.

5. Consider the independent auditors’ judgments about the quality and appropriateness of

    the Company’s accounting principles as applied in its financial reporting.

D. Internal Audit Function and Legal Compliance

1. Annually review and approve the budget and audit plan of the internal audit function.

    2. On at least a semi-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 (in coordination with other

    committees), and inquiries received from regulators or governmental agencies.

     4

E. Other Audit Committee Responsibilities

1. Annually prepare such report and certification to shareholders and the Exchange as

    required by Securities and Exchange Commission regulations or Exchange rules.

2. Report to the Board of Directors at its next meeting on significant results of the foregoing

    activities.

3. As considered necessary by the Committee, review policies and procedures as well as

    audit results associated with directors’ and officers’ travel and entertainment expenses.

4. Establish procedures for, and regularly review:

    a. the receipt, retention and treatment of complaints received by the Company regarding

    accounting, internal accounting controls, or auditing matters;

    b. the confidential anonymous submission by employees of the Company of concerns

    regarding questionable accounting or auditing matters; and

    c. the receipt from counsel for the Company of a report of evidence of a material

    violation of securities law or breach of fiduciary duty or similar violation by the

    Company or any agent thereof,

5. 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.

6. Periodically review materials or receive education on audit committee-related and new

    accounting and auditing-related developments and best practices.

7. Annually evaluate the Committee’s performance of its responsibilities.

8. Review the determinations of the Nominating and Governance Committee on the

    qualifications of Committee members under relevant standards and requirements for

    Committee membership.

     5

Report this document

For any questions or suggestions please email
cust-service@docsford.com