Audit Committee Charter
As Amended November 18, 2010
I. Purpose
The purpose of the Audit Committee (the "Audit Committee") of the Board of Directors (the "Board") of CSG International International, Inc. (the "Company") is to oversee the accounting, auditing, risk management, financial reporting and compliance processes of the Company.
II. Relation to Company´s Independent Auditors
The Audit Committee, in its capacity as a committee of the Board, is directly responsible for the appointment, compensation, retention, and oversight of the work of 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; and each such registered public accounting firm is accountable and shall report directly to the Audit Committee. References in this Charter to the Company´s "independent auditors" shall mean any such registered public accounting firm.
III. Relation to Company´s Internal Audit Department
The Audit Committee is directly responsible for oversight of the work and the adequacy of the authority, responsibilities, and functions of the Company´s internal audit department ("Internal Audit"). Internal Audit will report functionally to the Audit Committee and will report administratively to the Company´s chief financial officer.
IV. Composition and Appointment
The Audit Committee shall be composed of three or more members of the Board, each of whom (i) shall be an "independent director" as defined in Rule 4200(a)(15) of The Nasdaq Stock Market, Inc. ("Nasdaq") and any other applicable rules of Nasdaq, (ii) shall be independent based upon the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, (iii) shall not have participated in the preparation of the financial statements of the Company or any current subsidiary of the Company during the past three years, and (iv) is able to read and understand fundamental financial statements, including a company´s balance sheet, income statement, and cash flow statement. At all times the Audit Committee shall have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in such member´s financial sophistication (such as being or having been a chief executive officer, chief financial officer, or other senior officer with financial oversight responsibilities).
Based upon the recommendations of the Nominating and Corporate Governance Committee of the Board, the Board shall appoint the members of the Audit Committee at such times as the Board may deem necessary or appropriate, and the members of the Audit Committee shall serve at the pleasure of the Board.
Based upon the recommendation of the Nominating and Corporate Governance Committee of the Board, the Board from time to time shall appoint from among the members of the Audit Committee a chairperson of the Audit Committee who shall serve in such capacity at the pleasure of the Board.
V. Meetings and Actions
The Audit Committee shall meet at least quarterly, either in conjunction with meetings of the Board or at such other or additional times as the Audit Committee shall determine. The chairperson of the Audit Committee or any two members of the Audit Committee may call a meeting of the Audit Committee at any time upon notice given in accordance with the bylaws of the Company.
The Audit Committee shall keep regular minutes of its meetings and shall report to the Board on its actions and other matters set forth in this Charter at such times as the Board or this Charter may require and at such other times as the Audit Committee may deem necessary or appropriate.
Members of the Audit Committee may participate in a meeting of the Audit Committee through conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting.
At all meetings of the Audit Committee, a majority of the then members of the Audit Committee shall constitute a quorum for the transaction of business; and the vote of a majority of the members of the Audit Committee at any meeting of the Audit Committee at which a quorum is present shall be the act of the Audit Committee.
Any actions required or permitted to be taken at a meeting of the Audit Committee may be taken without a meeting if (i) all members of the Audit Committee consent to such action in writing and (ii) such written consents are filed with the minutes of meetings of the Audit Committee.
The Audit Committee may delegate to its chairperson or another member of the Audit Committee the performance of any of the responsibilities of the Audit Committee, either in a specific instance or on a continuing basis. In the event of such a delegation, the person to whom such performance is delegated shall report to the Audit Committee at its next meeting on the manner in which such person carried out such delegated performance, including but not limited to any decisions by such person to pre-approve any audit or permissible non-audit services to be provided by the Company´s independent auditors.
To the extent not inconsistent with this Charter, the provisions of the bylaws of the Company applicable to committees of the Board shall be applicable to the Audit Committee except that only the Board may appoint members of the Audit Committee.
VI. Responsibilities
To accomplish its purpose, the Audit Committee shall:
- Appoint the Company´s independent auditors; evaluate the performance of the Company´s independent auditors; and, if appropriate, remove and replace the Company´s independent auditors.
- Prior to the initial engagement of any firm of independent auditors for the Company (i) obtain in writing from such firm a description of all relationships between such firm or any affiliates of such firm and the Company (or persons in financial reporting oversight roles at the Company) that may be reasonably thought to bear on the independence of such firm and (ii) discuss with such firm the potential effects of those relationships on the independence of such firm. At least annually, (i) obtain from the Company´s independent auditors the written disclosures and other communications required by the then applicable rules of the Public Company Accounting Oversight Board (the "PCAOB"), (ii) discuss with the Company´s independent auditors the independence of such auditors, (iii) actively engage in a dialogue with the Company´s independent auditors with respect to any relationships or services disclosed in such written disclosures and other communications which may impact the objectivity and independence of such independent auditors and (iv) take, or recommend that the Board take, appropriate actions to oversee the independence of the Company´s independent auditors.
- Determine and approve (i) all audit and permissible non-audit services to be provided to the Company by the Company´s independent auditors and all audit services to be provided to the Company by anyone other than the Company´s independent auditors, in each case in advance of the performance of such services, (ii) the terms of the engagement of the Company´s independent auditors or any other auditors to perform such services, and (iii) the compensation to be paid to the Company´s independent auditors or any other auditors for such services.
- Meet with the Company´s independent auditors prior to each annual audit to review the planning, staffing, scheduling, scope, and any anticipated special emphases of such audit and, if necessary, meet with the Company´s independent auditors during the course of such audit with respect to any changes in any of such matters or to receive reports on the progress of such audit.
- Oversee the work of the Company´s independent auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Company.
- Review and discuss with the Company´s independent auditors (i) any problems or difficulties such auditors are encountering or may have encountered in connection with an annual audit or any interim financial statement review, (ii) any disagreements between management of the Company and the Company´s independent auditors regarding the application of any accounting principles or other matters, and (iii) any audit or other financial statement adjustments, revisions, or clarifications proposed by the Company´s independent auditors which were not made by the Company.
- Resolve any disagreements between management of the Company and the Company´s independent auditors regarding financial reporting.
- Review any management letter or other recommendations for the improvement of the Company´s accounting practices or internal controls provided to the Company by the Company´s independent auditors and the Company´s response to such letter.
- Review any material weaknesses or significant deficiencies in the Company´s internal control environment reported to the Audit Committee by Internal Audit or by the Company´s independent auditors and monitor actions taken by the Company to address such material weaknesses or significant deficiencies.
- Review significant changes in the Company´s accounting principles or practices, financial reporting policies, or internal controls proposed by management of the Company or recommended by the Company´s independent auditors.
- Review an analysis prepared by management of the Company and the Company´s independent auditors of significant financial reporting issues and judgments made in connection with the preparation of the Company´s financial statements.
- Review and discuss at least annually with the Company´s independent auditors the judgments of such auditors with respect to (i) the quality, appropriateness, and acceptability of the Company´s accounting principles as applied in the Company´s financial reporting, (ii) the adequacy and clarity of the disclosures made in the Company´s financial statements, (iii) the application of particular accounting principles or practices to significant new transactions or events involving the Company, (iv) the adequacy and effectiveness of the Company´s internal accounting and financial controls, and (v) the Company´s compliance with its established accounting practices and procedures and system of internal controls.
- Review and discuss with management of the Company and the Company´s independent auditors the Company´s annual audited financial statements.
- Discuss with the Company´s independent auditors the matters required to be communicated to the Audit Committee by the then applicable rules of the PCAOB.
- Obtain appropriate assurances from the Company´s independent auditors that the requirements of Section 10A of the Securities Exchange Act of 1934 have been satisfied in connection with each audit of the Company´s financial statements and receive from the Company´s independent auditors and review the reports required by Section 10(A)(k) of the Securities Exchange Act of 1934.
- Comply with the applicable requirements of Item 407(d) of Regulation S-K of the United States Securities and Exchange Commission (the "SEC").
- Make a recommendation to the Board with respect to the inclusion of the Company´s audited financial statements in the Company´s Annual Reports on Form 10-K to be filed with the SEC prior to the filing of such reports.
- Review with management of the Company and the Company´s independent auditors the Company´s quarterly financial statements to be included in the Company´s Quarterly Reports on Form 10-Q to be filed with the SEC prior to the filing of such reports.
- Review with the Company´s general counsel legal matters that may have a material impact on the Company´s financial statements and any material reports or inquiries received from any governmental agency or other regulatory body.
- Meet at least annually with the Company´s chief financial officer and independent auditors, in separate executive sessions, to discuss any matters relating to the financial statements and accounting practices of the Company which have not been addressed by the Audit Committee in the performance of its responsibilities set forth in the preceding Paragraphs 1 through 19 and which the Audit Committee, the chief financial officer, or the independent auditors may consider appropriate for discussion.
- Review with Internal Audit each proposed engagement of an independent provider of internal audit services to supplement the resources of Internal Audit, including but not limited to (i) the scope of the independent services to be provided and (ii) the terms of the engagement (including but not limited to compensation) of such independent provider. Any independent provider of internal audit services to the Company shall report directly to the Company´s director of Internal Audit.
- Meet at least annually, in executive session, with the senior person responsible for any internal audit function of the Company, whether performed with the Company´s own employees or by an independent provider of internal audit services, (i) to review the scope of such internal audit function and the current internal audit goals and plans, (ii) to receive a report on the type, extent, and results of the Company´s internal audit activities since the last such report, and (iii) to discuss any matters relating to the financial statements, accounting and risk management practices, and internal controls of the Company which the Audit Committee or such internal auditor may consider appropriate for discussion.
- At least annually review the staffing of the Company´s financial management, accounting, internal audit, and compliance functions and assess the adequacy of such staffing and the performance and competence of both the Company´s senior personnel responsible for such functions and any independent provider of internal audit services.
- Review and concur in the appointment, replacement, reassignment, or dismissal of the Company´s chief financial officer, principal accounting officer, senior internal auditor, and chief compliance officer.
- Establish procedures for (i) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, compliance or auditing matters and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.
- Review and approve or disapprove all related party transactions for potential conflict of interest situations on an ongoing basis whenever the Audit Committee is informed or becomes aware of any such existing or proposed transaction. For purposes of this Paragraph 26, "related party transactions" means transactions required to be disclosed pursuant to SEC Regulation S-K, Item 404. The Audit Committee shall report to the Board all actions that the Audit Committee takes pursuant to this Paragraph 26.
- Review and discuss with management the Company’s Business Risk Management processes.
- Establish such policies and procedures as the Audit Committee from time to time may deem necessary or appropriate to enable the Audit Committee to fully and properly perform its responsibilities and accomplish the purpose of the Audit Committee.
- Meet at least annually, in executive session, with the chief compliance officer of the Company, (i) to review the Company’s compliance program, (ii) to receive a report on the type, extent, and results of the Company´s compliance activities since the last such report, and (iii) to discuss any matters relating to compliance with applicable legal requirements and/or the Company’s code of conduct which the Audit Committee or the chief compliance officer may consider appropriate for discussion. The chief compliance officer shall have the express authority to communicate personally to the Audit Committee promptly on any matter involving criminal conduct or potential criminal conduct.
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Whenever necessary or appropriate to enable the Audit Committee to perform its responsibilities set forth in this Section VI, references to the "Company" shall include the Company´s direct and indirect subsidiaries.
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The Audit Committee at all times shall have direct and unrestricted access to (i) the Company´s independent auditors, (ii) any independent provider of internal audit services to the Company, and (iii) those employees of the Company or other persons (including but not limited to persons responsible for any internal audit function of the Company) whose duties or knowledge may assist the Audit Committee in carrying out its responsibilities under this Section VI.
The Company´s independent auditors and those persons responsible for any internal audit function of the Company at all times shall have direct and unrestricted access to the Audit Committee and may communicate directly with the Audit Committee at any time.
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While the Audit Committee has the responsibilities set forth in this Section VI, the Audit Committee does not have the duty to plan or conduct audits or to determine that the Company´s financial statements are complete and accurate and have been prepared in accordance with generally accepted accounting principles, such matters being the responsibility of management of the Company and the Company´s independent auditors.
VII. Independent Counsel and Other Advisers
The Audit Committee shall have the authority to engage independent counsel and other advisers as the Audit Committee may deem necessary to carry out its responsibilities. The Company shall provide appropriate funding, as determined by the Audit Committee in its capacity as a committee of the Board, for the payment of compensation to (i) the Company´s independent auditors engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the Company, (ii) any independent provider of internal audit services to the Company, and (iii) any independent counsel and other advisers engaged by the Audit Committee and for the payment of ordinary administrative expenses of the Audit Committee that are necessary or appropriate to enable the Audit Committee to carry out its duties.
VIII. Annual Review of Charter and Evaluation of Committee Performance
At least annually the Audit Committee shall review and reassess the adequacy of this Charter and recommend to the Board any proposed changes in this Charter. The Audit Committee also shall annually evaluate its own performance and report to the Board on such evaluation.