2003 Audit Charter: CGC



Cascade Natural Gas Corporation's Audit Committee of the Board of Directors is composed of at least three directors independent of Corporation management and free of any relationship that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a committee member. Members of the Audit Committee shall have a working familiarity with basic finance and accounting practices, and at least one member shall have accounting or related financial management experience. Members of the Audit Committee may not receive from the Corporation any compensation other than Board-approved fees for service on the Audit Committee, other committees, or the Board of Directors.

Statement of Policy

The Audit Committee assists Cascade's Board of Directors in fulfilling its responsibility to shareholders, potential shareholders, and the investment community relating to corporate accounting, reporting practices, and the quality and integrity of the financial reports of the Corporation. In so doing, it is the Audit Committee's responsibility to maintain free and open communication with directors, independent auditors, internal auditors, and the financial, accounting and executive management of the Corporation.


The function of the Audit Committee is oversight with the following principal responsibilities and authority:

  • Sole authority to engage, set compensation for and dismiss independent auditors, to audit financial statements of the Corporation and its divisions and subsidiaries, and to approve any non-audit relationship with the independent auditors. The independent auditors shall report directly to the Audit Committee.

  • The Audit Committee will have the authority to retain independent legal, accounting or other advisors. The corporation shall provide appropriate funding, as determined by the Audit Committee, for the engagement of the independent auditors and such advisors.

  • Meet with the independent auditors and financial management of the corporation to review the scope of the proposed audit for the current year and the audit procedures to be utilized. Review audit conclusions, comments and recommendations of the independent auditors, and oversee resolution of disagreements between management and the independent auditors regarding financial reporting.

  • Annually review a report by the independent auditor describing (a) the independent auditor's internal quality-control procedures; (b) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditor, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the independent auditor, and any steps taken to deal with any such issues; and (c), in order to assess the auditor's independence, all relationships between the independent auditor and the Corporation. Evaluate and engage in discussions concerning any disclosed issues, relationships or services that may impact the


    independent auditor's qualifications, performance and independence, and present its conclusions to the Board of Directors.

  • Review with the independent auditors, the internal auditor, and the corporation's financial, accounting and executive management, the adequacy and effectiveness of the accounting and financial controls of the corporation.

  • Advise the Board of Directors with respect to the corporation's policies and procedures regarding internal controls, disclosure controls, and compliance with laws and regulations applicable to such controls and compliance.

  • Provide sufficient opportunity for internal and independent auditors to meet at least quarterly with members of the Audit Committee without members of management present. Among items to be discussed in these meetings are the independent auditors' evaluation of the corporation's financial, accounting, and auditing personnel, and the cooperation that the independent auditors received during the course of the audit.

  • Review the internal audit function of the corporation including its independence, authority, and reporting obligations, the proposed audit plans for the coming year and the coordination of such plans with the independent auditors.

  • Review the financial statements contained in the annual report to shareholders and the SEC Form 10-K with management and the independent auditors to determine that the independent auditors are satisfied with the financial statements' disclosure and content. Discussions will include quality of earnings, review of reserves and accruals, consideration of the suitability of accounting principles, critical accounting policies, review of highly judgmental areas, audit adjustments whether or not recorded, and other inquiries. After satisfactory review by the committee, the corporation's Board of Directors shall be responsible for approving for filing the audited financial statements included in the SEC annual report on Form 10-K.

  • Submit the report of the Audit Committee, as required by the rules of the SEC, to be included in the corporation's annual proxy statement.

  • Review the interim financial statements before they are released and filed. The interim review includes meetings with the independent auditors and the financial, accounting and executive management of the Corporation.

  • Review earnings guidance to be provided by management before it is released to the public.

  • Report matters discussed at each committee meeting to the Board of Directors and submit Audit Committee Minutes for their review and approval.

  • Establish procedures for the receipt, retention and treatment of complaints received by the corporation regarding accounting, internal audit controls, or auditing matters, and the confidential, anonymous submission by employees of the corporation of concerns regarding questionable accounting or auditing matters.

  • Annually review this charter, perform a self-evaluation and recommend changes to the Board of Directors. The Board of Directors and the Audit Committee are committed to ensuring the corporation meets all applicable laws, rules, regulations and standards related to disclosure of business and financial information to the public.