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BerkshireHathawayInc.AuditCommitteeCharter
CommitteeMembership:
TheAuditCommitteeofBerkshireHathawayInc.(the“Company”)shallbecomprisedofat
leastthreedirectors,eachofwhomtheBoardhasdeterminedhasnomaterialrelationshipwiththeCompanyandeachofwhomisotherwise“independent”undertherulesoftheNewYorkStockExchange,Inc.andRule10A-3undertheSecuritiesExchangeActof1934
TheBoardshallalsodeterminethateachmemberis“financiallyliterate,”andthatonememberoftheAuditCommitteehas“accountingorrelatedfinancialmanagementexpertise,”assuch
qualificationsareinterpretedbytheBoardofDirectorsinitsbusinessjudgment,andwhether
anymemberoftheAuditCommitteeisan“auditcommitteefinancialexpert,”asdefinedbytherulesofSecuritiesandExchangeCommission(the“SEC”).IftheBoardhasdeterminedthatamemberoftheAuditCommitteeisanauditcommitteefinancialexpert,itmaypresumethat
suchmemberhasaccountingorrelatedfinancialmanagementexpertise.
NodirectormayserveasamemberoftheAuditCommitteeifsuchdirectorservesontheauditcommitteesofmorethantwootherpubliccompaniesunlesstheBoardofDirectorsdeterminesthatsuchsimultaneousservicewouldnotimpairtheabilityofsuchdirectortoeffectivelyserveontheAuditCommittee,anddisclosesthisdeterminationintheCompany’sannualproxy
statement.
MembersshallbeappointedbytheBoardandshallserveatthepleasureoftheBoardandforsuchtermortermsastheBoardmaydetermine.
CommitteePurposes:
ThepurposesoftheAuditCommitteeareto:
1.assistBoardoversightof(i)theintegrityoftheCompany’sfinancialstatements,(ii)theCompany’scompliancewithlegalandregulatoryrequirements,(iii)theindependentauditors’qualificationsandindependence,and(iv)theperformanceoftheindependentauditorsandtheCompany’sinternalauditfunction;and
2.preparethereportrequiredtobepreparedbytheAuditCommitteepursuanttotherulesoftheSECforinclusionintheCompany’sannualproxystatement.
ThefunctionoftheAuditCommitteeisoversight.ThemanagementoftheCompanyis
responsibleforthepreparation,presentationandintegrityoftheCompany’sfinancialstatements.Managementisresponsibleformaintainingappropriateaccountingandfinancialreporting
policiesandinternalcontrolsandproceduresthatprovideforcompliancewithaccounting
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standardsandapplicablelawsandregulations.Theindependentauditorsareresponsiblefor
planningandcarryingoutaproperauditoftheCompany’sconsolidatedannualfinancial
statements,reviewsoftheCompany’sconsolidatedquarterlyfinancialstatementspriortothefilingofeachquarterlyreportonForm10-Q,andotherprocedures.Infulfillingtheir
responsibilitieshereunder,itisrecognizedthatmembersoftheAuditCommitteearenotfulltimeemployeesoftheCompanyandarenot,anddonotrepresentthemselvestobe,performingthe
functionsofauditorsormanagement.Assuch,itisnotthedutyorresponsibilityoftheAuditCommitteeoritsmemberstoconduct“fieldwork”orothertypesofauditingoraccounting
reviewsorproceduresortosetauditorindependencestandards.
TheindependentauditorsshallsubmittotheAuditCommitteeannuallyaformalwritten
statement(the“Auditors’Statement”)describing:theauditors’internalquality-control
procedures;anymaterialissuesraisedbythemostrecentinternalquality-controlrevieworpeerreviewoftheauditors,orbyanyinquiryorinvestigationbygovernmentalorprofessional
authorities,withintheprecedingfiveyears,respectingoneormoreindependentauditscarriedoutbytheauditors,andanystepstakentodealwithanysuchissues;and,toassesstheauditors’independence,allrelationshipsbetweentheindependentauditorsandtheCompany,includingthematterssetforthinIndependenceStandardsBoardNo.1.
CommitteeDutiesandResponsibilities:
Tocarryoutitspurposes,theAuditCommitteeshallhavethefollowingdutiesandresponsibilities:
1.withrespecttotheindependentauditors,
(i)tobedirectlyresponsiblefortheappointment,compensation,retentionandoversightoftheworkoftheindependentauditors(includingtheresolutionofdisagreementsbetweenmanagementandtheindependentauditorsregardingfinancialreporting),whoshallreportdirectlytotheAuditCommittee;
(ii)tobedirectlyresponsiblefortheappointment,compensation,retentionandoversightoftheworkofanyregisteredpublicaccountingfirm,otherthantheindependentauditors,engagedforthepurposeofpreparingorissuinganauditreportortoperformaudit,revieworattestationservices,whichfirmshallreportdirectlytotheAuditCommittee;
(iii)topre-approve,ortoadoptappropriateprocedurestopre-approve,allaudit
andnon-auditservicestobeprovidedbytheindependentauditors;
(iv)toensurethattheindependentauditorsprepareanddeliverannuallyan
Auditors’Statement(itbeingunderstoodthattheindependentauditorsareresponsiblefortheaccuracyandcompletenessofthisStatement),andtodiscusswiththeindependentauditorsanyrelationshipsorservicesdisclosed
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inthisStatementthatmayimpactthequalityofauditservicesortheobjectivityandindependenceoftheCompany’sindependentauditors;
(v)toobtainfromtheindependentauditorsinconnectionwithanyauditatimelyreportrelatingtotheCompany’sannualauditedfinancialstatementsdescribingallcriticalaccountingpoliciesandpracticesused,allalternativetreatmentsoffinancialinformationwithingenerallyacceptedaccountingprinciplesthathavebeendiscussedwithmanagement,ramificationsoftheuseofsuchalternativedisclosuresandtreatments,andthetreatmentpreferredbytheindependentauditors,andanymaterialwrittencommunicationsbetweentheindependentauditorsandmanagement,such
asany“management”letterorscheduleofunadjusted
differences;
(vi)totakeintoaccounttheopinionsofmanagementandtheCompany’s
directorofinternalauditinassessingtheindependentauditors’qualifications,performanceandindependence;
2.withrespecttotheinternalauditfunction,
(i)toreviewtheappointmentandreplacementoftheCompany’sdirectorofinternalaudit;
(ii)toadvisethedirectorofinternalauditthatheorsheisexpectedtoprovidetotheAuditCommitteesummariesofand,asappropriate,thesignificantreportsresultingfromauditsperformedbyinternalauditandmanagement’sresponsesthereto;and
(iii)toannuallyapprovetheInternalAuditplanandcharter;
3.withrespecttofinancialreportingprinciplesandpoliciesandinternalcontrolsandprocedures,
(i)toadvisemanagement,thedirectorofinternalauditandtheindependentauditorsthattheyareexpectedtoprovidetotheAuditCommitteeatimelyanalysisofsignificantfinancialreportingissuesandpractices;
(ii)toconsideranyreportsorcommunications(andmanagement’sand/orinternalaudit’sresponsesthereto)submittedtotheAuditCommitteebytheindependentauditorsrequiredbyorreferredtoinPCAOBAuditingStandardNo.16,asitmaybemodifiedorsupplemented,includingreportsandcommunicationsrelatedto:
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•deficienciesnotedintheauditinthedesignoroperationofinternalcontrols;
•considerationoffraudinafinancialstatementaudit;
•detectionofillegalacts;
•theindependentauditors’responsibilityundergenerallyacceptedauditingstandards;
•anyrestrictiononauditscope;
•significantaccountingpolicies;
•significantissuesdiscussedwiththenationalofficerespectingauditingoraccountingissuespresentedbytheengagement;
•managementjudgmentsandaccountingestimates;
•anyaccountingadjustmentsarisingfromtheauditthatwerenotedorproposedbytheauditorsbutwerepassed(asimmaterialorotherwise);
•disagreementswithmanagement;
•consultationbymanagementwithotheraccountants;
•difficultiesencounteredwithmanagementinperformingtheaudit;
•theindependentauditors’judgmentsaboutthequalityoftheentity’saccountingprinciples;
•reviewsofinterimfinancialinformationconductedbytheindependentauditors;
•goingconcernuncertainties;
•departuresfromthestandardauditor’sreport;
•overviewoftheauditstrategy,timingoftheaudit,andsignificantrisks;and
•theresponsibilities,budgetandstaffingoftheCompany’sinternalauditfunction;
(iii)tomeetwithmanagement,theindependentauditorsand,ifappropriate,the
directorofinternalaudit:
•discussthescopeoftheannualaudit;
•discusstheannualauditedfinancialstatementsandquarterlyfinancialstatements,includingtheCompany’sdisclosuresunder“Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations”;
•discussanysignificantmattersarisingfromanyaudit,includinganyauditproblemsordifficulties,whetherraisedbymanagement,directorofinternalauditortheindependentauditors,relatingtotheCompany’sfinancialstatements;
•todiscussanydifficultiestheindependentauditorsencounteredinthecourseoftheaudit,includinganyrestrictionsontheiractivities
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oraccesstorequestedinformationandanysignificant
disagreementswithmanagement;
•todiscussany“management”or“internalcontrol”letterissued,orproposedtobeissued,bytheindependentauditorstotheCompany;
•toreviewtheformofopiniontheindependentauditorsproposetorendertotheBoardofDirectorsandshareholders;and
•todiscuss,asappropriate:(a)anymajorissuesregardingaccountingprinciplesandfinancialstatementpresentations,includinganysignificantchangesintheCompany’sselectionorapplicationofaccountingprinciples,andmajorissuesastotheadequacyoftheCompany’sinternalcontrolsandanyspecialauditstepsadoptedinlightofmaterialcontroldeficiencies;(b)analysespreparedbymanagementand/ortheindependentauditorssettingforthsignificantfinancialreportingissuesandjudgmentsmadeinconnectionwiththepreparationofthefinancialstatements,includinganalysesoftheeffectsofalternativeGAAPmethodsonthefinancialstatements;and(c)theeffectofregulatoryandaccountinginitiatives,aswellasoff-balancesheetstructures,onthefinancialstatementsoftheCompany;
(iv)toinquireoftheCompany’schiefexecutiveofficerandchieffinancial
officerastotheexistenceofanysignificantdeficienciesandmaterialweaknessesinthedesignoroperationofinternalcontroloverfinancialreportingwhicharereasonablylikelytoadverselyaffecttheCompany’sabilitytorecord,process,summarizeandreportfinancialinformationandanyfraud,whetherornotmaterial,thatinvolvesmanagementorotheremployeeswhohaveasignificantroleintheCompany’sinternalcontroloverfinancialreporting;
(v)todiscussguidelinesandpoliciesgoverningtheprocessbywhichseniormanagementoftheCompanyandtherelevantdepartmentsoftheCompanyassessandmanagetheCompany’sexposuretorisk,includingcybersecuritythreatsandenvironmentalandsocialriskssuchasclimatechangeanddiversity,respectively,andtodiscusstheCompany’smajorfinancialriskexposuresandthestepsmanagementhastakentomonitorandcontrolsuchexposures;
(vi)toobtainfromtheindependentauditorsassurancethattheauditwas
conductedinamannerconsistentwithSection10AoftheSecuritiesExchangeActof1934,asamended,whichsetsforthcertainprocedurestobefollowedinanyauditoffinancialstatementsrequiredundertheSecuritiesExchangeActof1934;
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(vii)todiscusswithseniormanagementoftheCompanyanysignificantlegal,
complianceorregulatorymattersthatmayhaveamaterialeffectonthefinancialstatementsortheCompany’sbusiness,financialstatementsorcompliancepolicies,includingmaterialnoticestoorinquiriesreceivedfromgovernmentalagencies;
(viii)todiscussthetypeandpresentationofinformationtobeincludedin
earningspressreleases;
(ix)toestablishproceduresforthereceipt,retentionandtreatmentofcomplaints
receivedbytheCompanyregardingaccounting,internalaccountingcontrolsorauditingmatters,andfortheconfidential,anonymoussubmissionbyCompanyemployeesofconcernsregardingquestionableaccountingorauditingmatters;
(x)toreviewanddiscussanyreportsconcerningmaterialviolationssubmittedtoitbyCompanyattorneysoroutsidecounselpursuanttotheSECattorneyprofessionalresponsibilityrules(17C.F.R.Part205),orotherwise;
(xi)toestablishhiringpoliciesforemployeesorformeremployeesofthe
independentauditors;and
(xii)toreviewandapproveallrelated-partytransactionsthatarerequiredtobe
disclosedunderItem404(a)ofRegulationS-K.
4.withrespecttoreportingandrecommendations,
(i)toprepareanyreportorotherdisclosures,includinganyrecommendationoftheAuditCommittee,requiredbytherulesoftheSECtobeincludedintheCompany’sannualproxystatement;
(ii)toprepareandissuetheevaluationrequiredunder“PerformanceEvaluation”below;and
(iii)toreportitsactivitiestothefullBoardofDirectorsonaregularbasisandto
makesuchrecommendationswithrespecttotheaboveandothermattersastheAuditCommitteemaydeemnecessaryorappropriate.
CommitteeStructureandOperations:
TheAuditCommitteeshalldesignateonememberoftheCommitteeasitschairperson.The
AuditCommitteeshallmeetonceeveryquarter,ormorefrequentlyifcircumstancesdictate,todiscusswithmanagementtheannualauditedfinancialstatementsandquarterlyfinancial
statements,asapplicable.TheAuditCommitteeshouldmeetseparatelyperiodicallywith
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management,thedirectorofinternalauditandtheindependentauditorstodiscussanymatters
thattheAuditCommitteeoranyofthesepersonsorfirmsbelieveshouldbediscussedprivately.TheAuditCommitteemayrequestanyofficeroremployeeoftheCompanyortheCompany’soutsidecounselorindependentauditorstoattendameetingoftheAuditCommitteeortomeetwithanymembersof,orconsultantsto,theAuditCommittee.MembersoftheAuditCommitteemayparticipateinameetingoftheAuditCommitteebymeansofconferencecallorsimilar
communicationsequipmentbymeansofwhichallpersonsparticipatinginthemeetingcanheareachother.
PerformanceEvaluation:
TheAuditCommitteeshallprepareandrev
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