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EXHIBIT 10.27
KEYSTONE AUTOMOTIVE INDUSTRIES, INC.
AUDIT COMMITTEE CHARTER
Organization
The Audit Committee of the Board of Directors shall be comprised of at least
three directors who are independent of management and the Company as defined in
the NASD rules.
Statement of Policy
The Audit Committee shall provide assistance to the directors in fulfilling
their responsibility to the shareholders, potential shareholders and the
investment community relating to corporate accounting, the reporting practices
of the Company and the quality and integrity of financial reports of the
Company.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the Company are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
. Obtain the full Board of Directors' approval of this Charter and review and
reassess this Charter annually.
. Recommend to the Board of Directors the independent auditors to be selected
to audit the financial statements of the Company and its divisions and
subsidiaries.
. Have a clear understanding with the independent auditors that they are
ultimately accountable to the Board of Directors and the Audit Committee,
as the shareholders' representatives, who have the ultimate authority in
deciding to engage, evaluate and if appropriate, terminate their services.
. Review and concur with management's appointment, termination or replacement
of the director of internal audit.
. Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit and quarterly reviews for the
current year and the procedures to be utilized, the adequacy of the
independent auditor's compensation and at the conclusion thereof review
such audit or quarterly reviews, including any comments or recommendations
of the independent auditors.
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. Review with the independent auditors, the Company's internal auditor and
financial and accounting personnel, the adequacy and effectiveness of the
accounting and financial controls of the Company and elicit any
recommendations for the improvement of such internal controls or particular
areas where new or more detailed controls or procedures are desirable.
Particular emphasis should be given to the adequacy of internal controls to
expose any payments, transactions or procedures that might be deemed
illegal or otherwise improper.
. Review reports received from regulators and review other legal and
regulatory matters that may have a material effect on the financial
statements or related Company compliance policies.
. Review the internal audit function of the Company including the
independence and authority of its reporting obligations, the proposed
internal audit plans for the coming year and the coordination of such plans
with the independent auditors.
. Inquire of management, the internal auditor and the independent auditors
about significant risks or exposures and assess the steps management has or
is taking to minimize such risks to the Company.
. Review on a periodic basis, a summary of findings from completed internal
audits and a progress report on the proposed internal audit plan with
explanations for any deviations from the original plan.
. Review the quarterly financial statements with financial management and the
independent auditors prior to the filing of the Form 10-Q (or prior to the
press release of results, if possible) to determine that the independent
auditors do not take exception to the disclosure and content of the
financial statements and discuss any other matters required to be
communicated to the Audit Committee by the auditors. The chair of the Audit
Committee may represent the entire Audit Committee for purposes of this
review.
. Review the financial statements to be contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of
the financial statements. Review with financial management and the
independent auditors the results of their timely analysis of significant
financial reporting issues and practices, including changes in, or
adoptions of, accounting principles and disclosure practices and discuss
any other matters required to be communicated to the Audit Committee by the
auditors. Also, review with financial management and the independent
auditors their judgments about the quality, not just acceptability, of
accounting principles and the clarity of the financial disclosure practices
used or proposed to be used and particularly the degree of aggressiveness
or conservatism of the Company's accounting principles and underlying
estimates, and other significant decisions made in preparing the financial
statements.
. Meet with the internal auditor and independent auditors without members of
management present. Among the items to be discussed in these meetings are
the independent auditors'
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evaluation of the Company's financial, accounting and auditing personnel
and the cooperation that the independent auditors received during the
course of audit.
. Report the results of the annual audit to the Board of Directors. If
requested by the Board, invite the independent auditors to attend the Board
of Directors' Meeting to assist in reporting the results of the annual
audit or to answer other directors' questions (alternatively, the other
directors, particularly the other independent directors, may be invited to
attend the Audit Committee meeting during which the results of the annual
audit are reviewed).
. On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professional services
as required by Independence Standards Board Standard No. 1, Independence
Discussions with Audit Committees. In addition, review with the independent
auditors the nature and scope of any disclosed relationships or
professional services and take, or recommend that the Board of Directors
take, appropriate action to ensure the continuing independence of the
auditors.
. Submit the minutes of all meetings of the Audit Committee to, or discuss
the matters discussed at each Audit Committee meeting with, the Board of
Directors.
. Investigate any matter brought to its attention within the scope of its
responsibilities, with the power to retain outside counsel for this purpose
if, in the Audit Committee's judgment, that is appropriate.
. Review the accuracy of the Company's disclosure in the proxy statement for
the Company's annual meeting of shareholders to the effect that the
Committee has (i) reviewed and discussed the audited financial statements
with management; (ii) discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61, as may
be modified or supplemented; (iii) received disclosures from the auditors
regarding the auditors' independence required by Independence Standards
Board Standard No. 1, as may be modified or supplemented, and discussed the
auditors' independence with the auditors and (iv) recommended to the Board
of Directors that the audited financial statements be included in the
Company's Annual Report on form 10-K for the last fiscal year for filing
with the Securities and Exchange Commission.
. Include a copy of this Charter in the Annual Report to shareholders or the
proxy statement at least triennially or the year after any significant
amendment to this Charter.
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