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Charter of the Audit Committee
of the Board of Directors
of Angeion Corporation
Adopted June 2, 2003
- Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to
assist the Board in fulfilling its oversight responsibilities.
The Audit Committee’s primary duties and responsibilities are
to:
- Monitor the integrity of the Company’s financial reporting
process and systems of internal controls regarding finance,
accounting and legal compliance.
- Select, engage and monitor the independence and performance
of the Company’s independent auditors.
- Provide an avenue of communication among the independent
auditors, management and the Board of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities and has direct
access to the independent auditors, as well as anyone in the
Company. The Audit Committee has the ability to retain, at
the Company’s expense, special legal, accounting, or other
consultants or experts it deems necessary in the performance
of its duties. This Charter was first adopted by the Board
of Directors effective June 1, 2000, and amended on March 27,
2002 and on June 2, 2003.
- Audit Committee Composition and Meetings
Audit Committee members are appointed by the Board. The members
of the Audit Committee will annually elect a Chair. If the
Audit Committee Chair is not present, the members of the Committee
present may designate a Chair by majority vote of the Committee
membership.
The composition and function of the Audit Committee will meet
the applicable rules and regulations of any exchange on which
the Company’s securities are listed or any system on which
the Company’s securities are quoted (the “Market”). Each member
of the Audit Committee will be “independent” as such term is
defined by the applicable rules and regulations of the Securities
and Exchange Commission (the “Commission”) and the Market.
The Audit Committee will be comprised of three or more directors
as determined by the Board, each of whom shall be free from
any relationship that would interfere with the exercise of
his or her independent judgment.
All members of the Committee shall have a basic understanding
of finance and accounting and be able to read and understand
fundamental financial statements, and at least one member of
the Committee shall have accounting or related financial management
expertise. If required by the Commission or the Market, the
Board of Directors will designate at least one member of the
Audit Committee as an “Audit Committee Financial Expert” as
defined by the then applicable rules and regulations.
The Committee will meet at least four times annually, or more
frequently as circumstances dictate. The Chair will prepare
an agenda in advance of each meeting. The Committee should
meet privately in executive session at least annually with
management, the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups
believe should be discussed. In addition, the Committee, or
at least its Chair, should communicate with management and
the independent auditors quarterly to review the Company’s
financial statements and significant findings based upon the
auditors’ limited review procedures.
- Audit Committee Responsibilities and Duties
Review Procedures:
- Review and reassess the adequacy of this Charter at least
annually. Submit the charter to the Board of Directors for
approval and have the document published at least every three
years in accordance with Commission regulations.
- Review the Company’s annual audited financial statements
prior to filing or distribution and recommend to the Board
of Directors the inclusion of the financial statements in
the Company’s annual report to be filed with the Commission.
Review and comment upon the Company’s annual report.
- In consultation with the management and the independent
auditors, consider the integrity of the Company’s financial
reporting processes and controls. Discuss significant financial
risk exposures and the steps management has taken to monitor,
control and report such exposures. Review significant findings
prepared by the independent auditors together with management’s
responses. Meet with management at least quarterly to review
management’s disclosure of fraud or deficiencies, if any,
in the design or operations of the Company’s internal controls.
- Review with financial management and the independent auditors
the Company’s quarterly financial results prior to the release
of earnings and the Company’s quarterly financial statements
prior to filing or distribution. Review and comment upon
the Company’s quarterly reports. Discuss any significant
changes to the Company’s accounting principles and any items
required to be communicated by the independent auditors in
accordance with SAS 61 (see paragraph 10).
- Review with management and the independent auditors, based
on reports required from the independent auditors, all critical
accounting policies and practices to be used; all alternative
treatments of financial information within GAAP that have
been discussed with management, ramifications of the use
of such alternative disclosures and treatments; and other
material written communications between the independent auditor
and management.
Independent Auditors
- Select and approve the engagement of the independent auditors
and remove the independent auditors, all in the Audit Committee’s
sole discretion. The Committee has sole authority and responsibility
for the appointment, oversight, termination and compensation
of the independent auditors. The independent auditors are
ultimately accountable to the Audit Committee.
- Approve all auditing services and permitted non-audit
services provided by the independent auditors, and the fees
and other significant compensation to be paid to the 3 independent
auditors.
- On an annual basis, the Committee should review and discuss
with the independent auditors all significant relationships
they have with the Company that could impair the auditors’
independence.
- Review the independent auditors audit plan – discuss scope,
staffing, locations, reliance upon management and general
audit approach.
- Prior to releasing the year-end earnings, discuss the
results of the audit with the independent auditors. Discuss
certain matters required to be communicated to audit committees
in accordance with AICPA SAS 61.
- Consider the independent auditors’ judgments about the
quality and appropriateness of the Company’s accounting principles
as applied in its financial reporting.
- On at least an 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, and inquiries
received from regulators or governmental agencies.
- Receive reports from the Company’s legal counsel regarding
any dispute, litigation, regulatory matter or proceeding
or any material violation of securities laws or breach of
fiduciary duty or similar violation by the Company or any
agent of the Company.
- Resolve any disagreements between management and the independent
auditors regarding financial reporting.
Other Audit Committee Responsibilities
- Establish procedures for the receipt, retention and treatment
of complaints received regarding accounting, internal accounting
controls or auditing matters, including allowing for the
submission of confidential and anonymous complaints.
- Prepare reports to shareholders as required by the Commission
or the Market.
- 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.
- Maintain minutes of meetings and periodically report to
the Board of Directors on significant results of the foregoing
activities.
- Periodically perform self-assessment of Audit Committee
performance.
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