Exhibit 99.1
INTER-ATLANTIC FINANCIAL, INC.
CHARTER OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The board of directors (the "BOARD") of Inter-Atlantic Financial, Inc. (the
"COMPANY") hereby establishes the Audit Committee of the Board with the
following purpose, authority, powers, duties and responsibilities.
PURPOSE
The purpose of the Audit Committee is to represent and assist the board of
directors (the "BOARD") of the Company in its general oversight of the Company's
accounting and financial reporting processes, audits of the financial
statements, and internal control and audit functions. Management is responsible
for (1) the preparation, presentation and integrity of the Company's financial
statements; (2) accounting and financial reporting principles; and (3) the
Company's internal controls and procedures designed to promote compliance with
accounting standards and applicable laws and regulations. The Company's
independent auditing firm is responsible for performing an independent audit of
the consolidated financial statements in accordance with generally accepted
auditing standards in the United States ("GAAP").
The Audit Committee members are not professional accountants or auditors
and their functions are not intended to duplicate or to certify the activities
of management and the independent auditor, nor can the Audit Committee certify
that the independent auditor is "independent" under applicable rules. The Audit
Committee serves a board level oversight role where it oversees the relationship
with the independent auditor, as set forth in this charter, receives information
and provides advice, counsel and general direction, as it deems appropriate, to
management and the auditors, taking into account the information it receives,
discussions with the auditor, and the experience of the Audit Committee's
members in business, financial and accounting matters.
MEMBERSHIP AND STRUCTURE
The Audit Committee is initially comprised of at least two directors
determined by the Board to meet the director and audit committee member
independence requirements and financial literacy requirements of the American
Stock Exchange, Inc. ("AMEX"), with an additional director meeting such
requirements to be appointed within one year of the closing of the Company's
initial public offering. At least one member of the Audit Committee must be
financially sophisticated, as determined by the Board, and no Audit Committee
member may have participated in the preparation of the financial statements of
the Company or any of the Company's current subsidiaries at any time during the
past three years, each as required by Amex listing standards. Appointment to the
Audit Committee and the designation of any Audit Committee members as "audit
committee financial experts" shall be made on an annual basis by the full Board.
Meetings of the Audit Committee shall be held at such times and places as
the Audit Committee shall determine, including by written consent. When
necessary, the Audit Committee shall meet in executive session outside of the
presence of any senior officer of the Company. The Chair of the Audit Committee
shall report on activities of the Audit Committee to the full Board. In
fulfilling its responsibilities the Audit Committee shall have authority to
delegate its authority to subcommittees, in each case to the extent permitted by
applicable law.
RESPONSIBILITIES
The Audit Committee:
- is directly responsible for the appointment, replacement, compensation,
and oversight of the work of the independent auditor. The independent
auditor shall report directly to the Audit Committee.
- obtains and reviews annually a report by the independent auditor
describing the Company's internal quality-control procedures, any
material issues raised by the most recent internal quality-control
review or by any inquiry or investigation by governmental or
professional authorities, and any steps taken to deal with any such
issues.
- reviews and discusses with the independent auditor the written statement
from the independent auditor concerning any relationship between the
auditor and the Company or any other relationships that may adversely
affect the independence of the auditor, and, based on such review,
assesses the independence of the auditor.
- establishes policies and procedures for the review and pre-approval by
the Audit Committee of all auditing services and permissible non-audit
services (including the fees and terms thereof) to be performed by the
independent auditor.
- reviews and discusses with the independent auditor: (a) its audit plans,
and audit procedures, including the scope, fees and timing of the audit;
(b) the results of the annual audit examination and accompanying
management letters; and (c) the results of the independent auditor's
procedures with respect to interim periods.
- reviews and discusses reports from the independent auditors on (a) all
critical accounting policies and practices used by the Company, (b)
alternative accounting treatments within GAAP related to material items
that have been discussed with management, including the ramifications of
the use of the alternative treatments and the treatment preferred by the
independent auditor, and (c) other material written communications
between the independent auditor and management.
- reviews and discusses with the independent auditor the independent
auditor's judgments as to the quality, not just the acceptability, of
the Company's accounting principles and such further matters as the
independent auditors present the Audit Committee under GAAP.
- discusses with the Company's officers and the independent auditor
quarterly earnings press releases, including the interim financial
information and other disclosures included therein, reviews the year-end
audited financial statements and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, if deemed
appropriate, recommends to the Board of Directors that the audited
financial statements be included in the Company's Annual Report on Form
10-K for the year.
- reviews and discusses with the Company's officers and the independent
auditor various topics and events that may have significant financial
impact on the Company or that are the subject of discussions between the
Company's officers and the independent auditors.
- reviews and discusses with the Company's officers the Company's major
financial risk exposures and the steps the Company's officers have taken
to monitor and control such exposures.
- reviews, passes on the fairness of, and approves related-party
transactions.
- reviews and discusses with the independent auditor, and the Company's
officers: (a) the adequacy and effectiveness of the Company's internal
controls (including any significant deficiencies and significant changes
in internal controls reported to the Committee by the independent
auditor or management; (b) the Company's internal audit procedures; and
(c) the adequacy and effectiveness of the Company's disclosures controls
and procedures, and management reports thereon.
- reviews annually with the Company's officers the scope of the internal
audit program, and reviews annually the performance of both the internal
audit group and the independent auditor in executing their plans and
meeting their objectives.
- reviews the use of auditors other than the independent auditor.
- reviews matters related to the corporate compliance activities of the
Company.
- establishes 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 employees of concerns regarding questionable
accounting or auditing matters.
- establishes policies for the hiring of employees and former employees of
the independent auditor.
- prepares the report of the Audit Committee required by the rules of the
United States Securities and Exchange Commission to be included in the
Company's annual proxy statement.
- when appropriate, designates one or more of its members to perform
certain of its duties on its behalf, subject to such reporting to or
ratification by the Audit Committee as the Audit Committee shall direct.
ADVISORS
The Audit Committee shall have the authority to engage independent legal,
accounting and other advisors, as it determines necessary to carry out its
duties. The Audit Committee shall have sole authority to approve related fees
and retention terms.