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 Audit Committee Charter

Purpose and Processes
The primary purpose of the Audit Committee (the "Committee") is to assist the Board of Directors (the "Board") in fulfilling its oversight responsibilities relating to:

  • the integrity of the Company's financial statements;
  • the financial reporting process;
  • the systems of internal accounting and financial controls;
  • the performance of the Company's internal audit function and independent auditors;
  • the independent auditors' procedures concerning qualifications and independence; and
  • the Company's compliance with legal and regulatory requirements and ethics programs as established by management.

The Committee shall also prepare the report required by the Securities and Exchange Commission (“SEC”) to be included in the Company’s annual proxy statement.

The independent auditors shall report directly to the Committee. The Committee shall regularly report to the Board on the results of its activities and submit to the Board any recommendations the Committee may have from time to time. The Company’s internal audit staff has a dual reporting relationship, directly to the Committee and to the Senior Vice President, General Counsel and Chief Compliance Officer of the Company. The Company shall provide appropriate funding, as determined by the Committee, for compensation to the independent auditors for preparing or issuing audit reports or performing other audit, review or attest services; and administrative expenses of the Committee that are necessary or appropriate for carrying out its duties.

The Committee may, from time to time, adopt rules and make provisions as deemed appropriate for the conduct of meetings, considering, acting upon and recording matters within its authority and making such reports to the Board as it may deem appropriate. In discharging its oversight role, the Committee is empowered to investigate any matter within the scope of its authority and may engage independent legal, accounting or other advisors to assist in its investigations as it deems necessary. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any advisors employed by the Committee to assist in such investigations.

Committee members shall be appointed by the Board on recommendation of the Committee on Nominations and Corporate Governance. The Committee shall be comprised of not less than three directors. Each member shall be a director who is independent of management and the Company. Members shall be considered independent as long as they do not accept any consulting, advisory, or other compensatory fees from the Company (other than director’s compensation), are not an affiliated person of the Company or its subsidiaries, and satisfy the independence requirements of the Company and the applicable stock exchange listing standards. All members shall have a basic understanding of finance and accounting and be able to read and understand fundamental financial statements. In addition, at least one member of the Committee shall be an "audit committee financial expert", as defined by regulations of the SEC.

Key Responsibilities
The Committee’s job is one of oversight, and it recognizes that the Company’s management is responsible for preparing the Company’s financial statements and that the independent auditors are responsible for auditing the Company’s annual financial statements and for reviewing the Company’s unaudited interim financial statements. Additionally, the Committee recognizes that the Company’s financial management (including the internal audit staff), as well as the independent auditors, have more time, knowledge and more detailed information on the Company than do Committee members; consequently, in carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditors’ work.

The Board has delegated to the Committee the following duties and responsibilities:

  • Appoint and terminate the Company’s independent auditors (subject, if applicable, to shareholder ratification or approval).
  • Review and pre-approve all audit and permitted non-audit services provided by the independent auditors. The Committee may delegate pre-approval authority to one or more members of the Committee. The decisions of any Committee member(s) to whom pre-approval authority is delegated must be presented to the full Committee at its next scheduled meeting.
  • Review with the independent auditors the planned scope and results of their audit.
  • Meet to review and discuss with management and the independent auditors the annual financial statements and quarterly financial statements, including the disclosures under "Management’s Discussion and Analysis of Financial Condition and Results of Operations"; consider any matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards; review with the independent auditors any audit problems or difficulties and management’s response; and resolve any disagreements between management and the auditor regarding financial reporting.
  • Receive reports from the independent auditors on the critical accounting policies and practices of the Company and the alternative treatments of financial information within generally accepted accounting principles that have been discussed with management.
  • Meet periodically with management, the internal auditors, and the independent auditors in separate executive sessions to discuss issues and concerns warranting Committee attention.
  • At least annually, obtain and review a report by the independent auditors describing:
    • The audit firm's internal quality control procedures;
    • Any material issues raised by the most recent internal quality control review, or peer review, of the firm, 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 firm, and any steps taken to deal with any such issues; and
    • All relationships between the independent auditors and the Company (to assess the auditors’ independence).
  • Review the scope and results of the Company's internal audit program.
  • Discuss policies with respect to risk assessment and risk management, including a review of matters involving major financial risk exposures to the Company and actions management has taken to monitor and control such exposures.
  • Review the Company’s Code of Ethics and Business Conduct and the procedures for monitoring compliance including procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters. At least annually, review compliance with applicable laws, regulations and the Code of Ethics and Business Conduct, including a review of any reports by attorneys representing the Company of any material violation of laws or breach of fiduciary duties.
  • Review filings made with the SEC as required.
  • Review and discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies.
  • Set clear hiring policies for employees or former employees of the independent auditors that meet the SEC regulations and applicable stock exchange listing standards.
  • Review and reassess the adequacy of its charter on an annual basis.
  • Conduct an annual performance evaluation of the Committee.
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