Exhibit 99.1
IOWA FIRST BANCSHARES CORP.
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 integrity of 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 Company's compliance with legal
and regulatory requirements as they relate to financial accounting and
disclosure issues, and the audit process.
In meeting its responsibilities, the Audit Committee is expected to:
1. Provide an open avenue of communication between the internal auditors, the
independent accountant, and the Board of Directors.
2. Review and update the committee's charter annually, recommending such
changes to the Board of Directors.
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. Recommend to the Board of Directors the appointment, compensation,
retention and oversight of the work of any other registered public
accounting firm engaged for the purpose of preparing or issuing an audit
report or to perform audit, review or attestation services.
5. Review and concur in the appointment, replacement, reassignment, or
dismissal of the internal audit staff.
6. Review, assess, and discuss the independence of the internal auditor and
the independent accountant, including a review and pre-approval of
management consulting services and related fees provided by the independent
accountant.
7. Discuss with management the timing and process for implementing the
rotation of the lead audit partner, the concurring partner and any other
active audit engagement team partner.
8. Inquire of the internal auditor and the independent accountant about
significant risks or exposures and assess the steps management has taken to
minimize such risk to the company.
9. Inquire of the Company's chief executive officer and chief financial
officer as to the existence of any significant deficiencies or material
weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Company's
ability to record, process, summarize and report financial information, and
as to the existence of any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company's
internal control over financial reporting. These certifying officers will
meet with the committee a minimum of four times annually to discuss
disclosure controls, internal controls, and any other issues deemed
necessary by management or the committee.
10. Consider, in consultation with the independent accountant and the internal
auditor, the audit scope and plan of the internal auditors and the
independent accountant.
11. Consider and review with the independent accountant and the internal
auditor:
a. The adequacy of the company's internal controls.
b. Any related significant findings and recommendations of the
independent accountant and internal auditing together with
management's responses thereto.
c. Any reports or communications (and management's and/or the internal
audit department's responses thereto) submitted to the Audit Committee
by the independent auditors required by or referred to in SAS 61 or
other professional standards.
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12. Review with management and the independent accountant at the completion of
the annual examination:
a. The company's annual financial statements, related footnotes, and
other schedules, including fees by category as defined in Item
9(e)(1)-(4) of Schedule 14A (proxy statement), before they are filed
with the SEC or other regulators.
b. The independent accountant's report relating to the Company's annual
audited financial statements describing all critical accounting
policies and practices used, all alternative treatments within
generally accepted accounting principles for policies and practices
related to material items that have been discussed with management,
ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent auditors,
and any material written communications between the independent
auditors and management, such as any "management" letter or schedule
of unadjusted differences.
c. Any significant changes required in the independent accountant's audit
plan.
d. Any significant difficulties or disputes with management encountered
during the course of the audit and their resolution.
e. Other matters related to the conduct of the audit which are to be
communicated to the committee under generally accepted auditing
standards.
13. Consider and review with the internal auditor and management, as deemed
appropriate:
a. Significant findings during the year and management's responses
thereto.
b. Any difficulties encountered in the course of the 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. The Internal Audit Department budget and staffing.
e. The Internal Audit Department Policy.
14. When necessary, meet with the internal auditor, the independent accountant,
and management in separate sessions to discuss any matters that the
committee or these groups believe should be discussed privately with the
Audit Committee.
15. Report committee actions to the Board of Directors with such
recommendations as the committee may deem appropriate.
16. Approve a letter for inclusion in the proxy statement that describes the
committee's composition and responsibilities, and how they were discharged.
17. Review and approve all related party transactions of the Company.
18. Review and discuss any reports concerning material violations submitted by
Company attorneys or outside counsel pursuant to the SEC attorney
professional responsibility rules (17 CFR Part 205).
19. Follow hiring policies for employees or former employees of the independent
auditors as defined by the appropriate regulation.
20. Maintain procedures for the receipt, retention, and treatment of complaints
received by Iowa First Bancshares Corp. regarding accounting, internal
accounting controls, or auditing matters. The Audit Committee will also
maintain procedures for the "confidential, anonymous submission by
employees" of concerns regarding questionable accounting or auditing
matters.
21. 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, without seeking approval of the Board or management.
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22. The Company shall provide for appropriate funding, as determined by the
Audit Committee, in its capacity as a committee of the Board, for payment
of:
a. Compensation to the independent auditors and any other public
accounting firm engaged for the purpose of preparing or issuing an
audit report or performing other audit, review or attest services for
the Company;
b. Compensation of any advisers employed by the Audit Committee; and
c. Ordinary administrative expenses of the Audit Committee that are
necessary or appropriate in carrying out its duties.
23. 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.
24. The committee shall appoint at least one member as an "Audit Committee
Financial Expert", as defined by the final rule implementing the
requirements of Section 407 of the Sarbanes - Oxley Act of 2002. In
addition, all members of the Committee must be sufficiently financially
sophisticated to be able to read and understand fundamental financial
statements, including a company's balance sheet, income statement, and cash
flow statement.
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 (as defined by appropriate SEC rules and regulations) of the
Board of Directors who shall serve at the pleasure of the Board of Directors.
Audit Committee members may not be an executive officer of or more than a 10%
shareholder of the issuer. Audit Committee members may not accept any
consulting, advisory, or other compensatory fees from Iowa First Bancshares
Corp. or its subsidiaries, other than in his or her capacity as a member of the
Audit Committee, Board of Directors, or other Board committee. Audit committee
members and the committee chairman shall be nominated by the Nominating
Committee, with subsequent approval by the full Board of Directors.
As stated previously, the function of the Audit Committee is oversight. The
management of the Company is responsible for the preparation, presentation and
integrity of the Company's financial statements and for the effectiveness of
internal control over financial reporting. Management and the internal auditing
department are responsible for maintaining appropriate accounting and financial
reporting principles, policies, internal controls and procedures that provide
for compliance with accounting standards and applicable laws and regulations as
they relate to financial accounting and disclosure issues. The independent
auditors are responsible for planning and carrying out a proper audit of the
Company's financial statements, reviews of the Company's quarterly financial
statements prior to the filing of each quarterly report on Form 10-Q, annually
auditing management's assessment of the effectiveness of internal control over
financial reporting (commencing in the fiscal year ending December 31, 2005),
and other procedures. In fulfilling their responsibilities, it is recognized
that members of the Audit Committee are not full-time employees of the Company
and are not, and do not represent themselves to be, performing the functions of
auditors or accountants. As such, it is not the duty or responsibility of the
Audit Committee or its members to conduct "field work" or other types of
auditing or accounting reviews or procedures or to set auditor independence
standards.
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.
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