ALLEN ORGAN COMPANY
Exhibit 99.1 - Audit Committee Charter
Charter of the Audit Committee of the Board of Directors
I. Audit Committee Purpose
The Audit Committee is appointed by the Board of Directors to assist
the Board in fulfilling its oversight responsibilities. The Audit
Committee's primary duties and responsibilities are to:
- Monitor the integrity of the Company's financial reporting process and
systems of internal controls regarding finance, accounting, and legal
compliance.
- Monitor the independence and performance of the Company's independent
auditors and internal auditing department.
- Provide an avenue of communication among the independent auditors,
management, the internal auditing department, and the Board
of Directors.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct
access to the independent auditors as well as anyone in the
organization. The Audit Committee has the ability to retain, at the
Company's expense, special legal, accounting, or other consultants or
experts it deems necessary in the performance of its duties.
II. Audit Committee Composition and Meetings
Audit Committee members shall meet the requirements of the NASDAQ
stock Exchange. The Audit Committee shall be comprised of three or
more directors as determined by the Board, each of whom shall be
independent nonexecutive directors, free from any relationship that
would interfere with the exercise of his or her independent judgment.
All members of the Committee shall have a basic understanding of
finance and accounting and be able to read and understand fundamental
financial statements, and at least one member of the Committee shall
have accounting or related financial management expertise.
Audit Committee members shall be appointed by the Board. If an audit
committee Chair is not designated or present, the members of the
Committee may designate a Chair by majority vote of the Committee
membership.
The Committee shall meet at least two times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The
Committee should meet privately in executive session at least annually
with management, the independent auditors, and as a committee to
discuss any matters that the Committee or each of these groups believe
should be discussed. In addition, the Committee, or at least its
Chair, should communicate with management and the independent auditors
quarterly to review the Company's financial statements and significant
findings based upon the auditors limited review procedures.
III. Audit Committee Responsibilities and Duties
Review Procedures
1.Review and reassess the adequacy of this Charter at least annually.
Submit the charter to the Board of Directors for approval and have
the document published at least every three years in accordance
with SEC regulations.
2.Review the Company's annual audited financial statements prior to
filing or distribution. Review should include discussion with
management and independent auditors of significant issues
regarding accounting principles, practices, and judgments.
3.In consultation with the management and the independent auditors,
consider the integrity of the Company's financial reporting
processes and controls. Discuss significant financial risk
exposures and the steps management has taken to monitor, control,
and report such exposures. Review significant findings prepared by
the independent auditors and the internal auditing department
together with management's responses.
4.Review with financial management and the independent auditors the
company's quarterly financial results prior to the release of earnings
and/or the company's quarterly financial statements prior to filing or
distribution. Discuss any significant changes to the Company's
accounting principles and any items required to be communicated
by the independent auditors in accordance with SAS 61 (see item 9).
The Chair of the Committee may represent the entire Audit Committee
for purposes of this review.
Independent Auditors
5.The independent auditors are ultimately accountable to the Audit
Committee and the Board of Directors. The Audit Committee shall
review the independence and performance of the auditors and
annually recommend to the Board of Directors the appointment of
the independent auditors or approve any discharge of auditors when
circumstances warrant.
6.Approve the fees and other significant compensation to be paid to the
independent auditors.
7.On an annual basis, the Committee should review and discuss with the
independent auditors all significant relationships they have with the
Company that could impair the auditors' independence.
8.Review the independent auditors audit plan - discuss scope, staffing,
locations, reliance upon management, and internal audit and general
audit approach.
9.Prior to releasing the year-end earnings, discuss the results of the
audit with the independent auditors. Discuss certain matters required
to be communicated to audit committees in accordance with AICPA SAS 61.
10.Consider the independent auditors' judgments about the quality and
appropriateness of the Company's accounting principles as applied in its
financial reporting.
Legal Compliance
11.On at least an annual basis, review with the Company's counsel, any
legal matters that could have a significant impact on the organization's
financial statements, the Company's compliance with applicable laws and
regulations, and inquiries received from regulators or governmental
agencies.
Other Audit Committee Responsibilities
12.Annually prepare a report to shareholders as required by the
Securities and Exchange Commission. The report should be included
in the Company's annual report.
13.Perform any other activities consistent with this Charter, the
Company's by-laws, and governing law, as the Committee or the Board
deems necessary or appropriate.
14.Maintain minutes of meetings and periodically report to the Board of
Directors on significant results of the foregoing activities.