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This example Audit Committee Report reects the content required by SEC Regulation S-K Item 306. Also included (and highlighted
in gray) are enhanced disclosures observed in practice. A number of companies currently disclose more information about their audit
committees than is required under relevant rules. With this example, we seek to alert audit committees to current disclosure practices.
Potential enhanced disclosure
Example report of
the audit committee
Report of the audit committee
The Audit Committee oversees the Company’s nancial reporting process on behalf of the Board of Directors. The Company’s
management has the primary responsibility for the nancial statements, for maintaining effective internal control over nancial
reporting, and for assessing the effectiveness of internal control over nancial reporting. In fullling its oversight responsibilities,
the Committee reviewed and discussed the audited [consolidated] nancial statements [and the related schedules] in the Annual
Report with Company management, including a discussion of the quality, not just the acceptability, of the accounting principles; the
reasonableness of signicant judgments; and the clarity of disclosures in the nancial statements.
The Committee is governed by a charter. A copy of the charter is available on the Company’s website at [specify location]. The charter
was last amended effective [specify date]. The Committee held [XX] meetings during scal year 20[XX]. The Committee is comprised
solely of independent directors as dened by the [indicate the applicable national securities exchange or national securities
association] listing standards and Rule 10A-3 of the Securities Exchange Act of 1934.
The membership of the Audit Committee, together with appointment dates and attendance at meetings, is set forth below:
Members Committee member since Attendance at full meetings during 20XX
[Name]
[Name]
[Name]
[Date]
[Date]
[Date]
[# of meetings attended out of total held (e.g., 7/7)
[# of meetings attended out of total held (e.g., 7/7)
[# of meetings attended out of total held (e.g., 7/7)
The meetings of the Committee are designed to facilitate and encourage communication among the Committee, the Company, the
Company’s internal audit function and the Company’s independent auditor. The Committee discussed with the Company’s internal
auditors and independent auditor the overall scope and plans for their respective audits. The Committee meets with the internal auditors
and the independent auditor, with and without management present, to discuss the results of their examinations; their evaluations of the
Company’s internal control [, including internal control over nancial reporting]; and the overall quality of the Company’s nancial
reporting.