M & A WEST, INC.
AUDIT COMMITTEE CHARTER
The audit committee is a committee of the board of directors. Its primary
function is to assist the board in fulfilling its oversight responsibilities by
reviewing the financial information which will be provided to the shareholders
and others, the systems of internal controls which management and the board of
directors have established, the audit process, reviewing all related party
transactions and performing background reviews of all persons or organizations
performing shareholder relations or providing public relation functions for the
company.
In meeting its responsibilities, the audit committee is expected to:
1. Provide an open avenue of communication between the internal accounting
staff, the independent accountant, and the board of directors.
2. Review and update the committee's charter annually.
3. Recommend to the board of directors the independent accountants to be
nominated, approve the compensation of the independent accountant, and
review and approve the discharge of the independent accountants.
4. Review and concur in the appointment, replacement, reassignment, or
dismissal of the director of all senior accounting personnel.
5. Confirm and assure the independence of the internal auditor and the
independent accountant, including a review of management consulting
services and related fees provided by the independent accountant.
6. Inquire of management, the senior accounting personnel, and the independent
accountant about significant risks or exposures and assess the steps
management has taken to minimize such risk to the company.
7. Consider, in consultation with the independent accountant and the chief
financial officer and/or controller, the audit scope and plan of the
internal auditors and the independent accountant.
8. Consider with management and the independent accountant the rationale for
employing audit firms other than the principal independent accountant.
9. Review with the chief financial officer and/or controller and the
independent accountant the coordination of audit effort to assure
completeness of coverage, reduction of redundant efforts, and the effective
use of audit resources.
10. Consider and review with the independent accountant and the chief financial
officer and/or controller:
(a) The adequacy of the company's internal controls including computerized
information system controls and security.
(b) Any related significant findings and recommendations of the
independent accountant and the chief financial officer together with
management's responses thereto.
11. Review with management and the independent accountant at the completion of
the annual examination:
(a) The company's annual financial statements and related footnotes.
(b) The independent accountant's audit of the financial statements and his
or her report thereon.
(c) Any significant changes required in the independent accountant's audit
plan.
(d) Any serious difficulties or disputes with management encountered
during the course of the audit.
(e) Other matters related to the conduct of the audit which are to be
communicated to the committee under generally accepted auditing
standards.
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12. Consider and review with management:
(a) Significant findings during the year and management's responses
thereto.
(b) Any difficulties encountered in the course of their audits, including
any restrictions on the scope of their work or access to required
information.
(c) Any changes required in the planned scope of their audit plan.
(d) Whether a internal auditing department will be needed.
13. Review filings with the SEC and other published documents containing the
company's financial statements and consider whether the information
contained in these documents is consistent with the information contained
in the financial statements.
14. Review with management and the independent accountant, the interim
financial report before it is filed with the SEC or other regulators.
15. Review policies and procedures with respect to officers' expense accounts
and perquisites, including their use of corporate assets, and consider the
results of any review of these areas by the internal auditor or the
independent accountant.
16. Review with management and the independent accountant the results of the
independent accountants review of the company's monitoring compliance with
the company's code of conduct.
17. Review legal and regulatory matters that may have a material impact on the
financial statements, related company compliance policies, and programs and
reports received from regulators.
18. Meet with the independent accountant, and management in separate executive
sessions to discuss any matters that the committee or these groups believe
should be discussed privately with the audit committee.
19. Report committee actions to the board of directors with such
recommendations as the committee may deem appropriate.
20. Review all transactions between the Company and any related party. Related
parties include but are not limited to all officers and directors,
including their spouses or relatives, all five percent (5%) or greater
shareholders including their spouses and affiliates.
21. Review all contracts with persons or entities who are to be retained by the
company to assist in inventor relations and/or public relations. The
committee is specifically authorized to employ investigators, attorneys or
other third parties to assist them in these matters.
22. Prepare a letter for inclusion in the annual report that describes the
committee's composition and responsibilities, and how they were discharged.
23. The audit committee shall have the power to conduct or authorize
investigations into any matters within the committee's scope of
responsibilities. The committee shall be empowered to retain independent
counsel, accountants, or others to assist it in the conduct of any
investigation.
24. The committee shall meet at least four times per year or more frequently as
circumstances require. The committee may ask members of management or
others to attend the meeting and provide pertinent information as
necessary.
25. The committee will perform such other functions as assigned by law, the
company's charter or bylaws, or the board of directors.
The membership of the audit committee shall consist of at least three
independent members of the board of directors each having financial acumen who
shall serve at the pleasure of the board of directors. Audit committee members
and the committee chairman shall be designated by the full board of directors
upon the recommendation of the nominating committee.
The duties and responsibilities of a member of the audit committee are in
addition to those duties set out for a member of the board of directors.
