Fidelity Bancorp, Inc.

 

Fidelity Bancorp, Inc. - Audit Committee Charter

The Audit Committee is a committee of the Board of Directors. The Audit Committee’s purpose is to oversee the accounting and financial reporting processes of the Company and the audits of the Company’s financial statements. The Audit Committee shall:

  • pre-approve all audit services and permissible non-audit services to be rendered by the independent auditor in accordance with Section 10A(i) of the Securities Exchange Act of 1934 (the “Act”);
  • have sole authority to appoint, determine the funding for the outside auditors in accordance with Section 10A(m)(2) of the Act;
  • have the responsibility to establish procedures for complaints as set forth in Section 10A(m)(4) of the Act; and
  • have the authority to engage and determine funding for independent counsel and other advisors as set forth in Section 10A(m)(5) of the Act.

The membership of the Audit Committee shall be composed of at least three directors who are independent of the management of the Company and are free of any relationship that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a Committee member. All members of the Committee shall 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.

For purposes hereof, "independent" shall mean a director who meets the definition of "independence" as used in Item 7(d)(3)(iv) of Schedule 14A of the Securities Exchange Act of 1934 ("Exchange Act"). At least one member of the Audit Committee shall possess the qualifications to serve as an "audit committee financial expert" as defined under SEC rules pursuant to the Exchange Act. The designation of a person as an "audit committee financial expert" does not impose any duties, obligations or liability on the person that are greater than those imposed on such a person as a member of the audit committee in the absence of such designation.

In meeting its responsibilities, the Audit Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to ensure to the Board of Directors and shareholders that the accounting and reporting practices of the Company are in accordance with all requirements and are of the highest quality.

The Audit Committee may establish written policies and procedures for the pre-approval of audit and non-audit services to be performed by the outside auditor provided that these policies and procedures are detailed as to the particular service and do not result in the delegation of the Audit Committee's responsibilities to management. The Audit Committee may, in its discretion, delegate to one or more of its members the authority to pre-approve audit or non-audit services to be performed by the outside auditor provided that any such approvals are presented to the full Committee at its next scheduled meeting.

The Audit Committee will:

  1. Provide an open avenue of communication between the Internal Auditor/Compliance Officer, the independent accountant and the Board of Directors.
  2. Review and update the Committee’s charter annually.
  3. Be directly responsible for the appointment, compensation, retention and oversight of the work of the independent auditor (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company. The independent auditor shall report directly to the Audit Committee.
  4. Review and concur in the appointment, replacement, reassignment or dismissal of the Internal Auditor/Compliance Officer.
  5. Confirm and assure the independence of the Internal Auditor/Compliance Officer and the independent accountant.
  6. Inquire of management, the Internal Auditor/Compliance Officer and the independent accountant about significant risks or exposures and assess the steps management has taken to minimize such risk to the Company.
  7. Consider, in consultation with the Internal Auditor/Compliance Officer and the independent accountant, the audit scope and plan of the internal auditors and independent accountant.
  8. Review with the Internal Auditor/Compliance Officer and the independent accountant the coordination of audit effort to assure completeness of coverage, reduction of redundant efforts and the effective use of audit resources.
  9. Consider and review with the independent accountant and the Internal Auditor/Compliance Officer:
    • The adequacy of the Company’s internal controls including computerized information system controls and security.
    • Any related significant findings and recommendations of the independent accountant and Internal Auditor/Compliance Officer together with management’s responses thereto.
  10. Review with management and the independent accountant at the completion of the annual examination:
    • The Company’s annual financial statements and related footnotes.
    • The independent accountant’s audit of the financial statements and their report thereon.
    • Any significant changes required in the independent accountant’s audit plan.
    • Any serious difficulties or disputes with management encountered during the course of the audit.
    • Other matters related to the conduct of the audit, which are to be communicated to the Committee under generally accepted auditing standards.
  11. Consider and review with management and the Internal Auditor/Compliance Officer:
    • Significant findings during the year and management’s responses thereto.
    • Any difficulties encountered in the course of the audits, including any restrictions on the scope of work or access to required information.
    • Any changes required in the planned scope of the audit/compliance review plan.
    • The internal auditing department budget and staffing.
  12. Review with management and the independent accountant at the end of each quarter:
    • The Company’s quarterly financial statements and related footnotes.
    • The independent accountant’s review of the financial statements and any comments they have thereon.
    • Any serious difficulties or disputes with management encountered during the review.
    • Other matters related to the conduct of the review, which are to be communicated to the Committee under generally accepted auditing standards.
  13. Review filings with the SEC, regulatory agencies and other published documents containing the Company’s financial statements and consider whether the information contained therein is consistent with the information contained in the financial statements.
  14. Review legal and regulatory matters that may have a material impact on the financial statements, related Company compliance policies, and programs and reports received from regulators.
  15. Meet with the Internal Auditor/Compliance Officer, the independent accountant and management in separate executive sessions to discuss any matters that the Committee or these groups believe should be discussed privately with the Audit Committee.
  16. Report Committee actions to the Board of Directors with such recommendations, as the committee may deem appropriate.
  17. The 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.
  18. The Committee shall meet at least four times per year or more frequently as circumstances require. At least once each year the Committee shall have separate private meetings in executive sessions with the independent auditors, management and the internal auditors. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee.
  19. The Audit Committee will establish 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.
  20. Prior to the filing of audited financial statements with the Securities and Exchange Commission, obtain a report from the independent auditor of:
    • All critical accounting policies and practices to be used:
    • All alternative treatments within generally accepted accounting principles and practices related to material items that have been discussed with management, including:
      • ramifications of the use of such alternative disclosures and treatments; and
      • the treatment preferred by the auditor; and
    • other material written communications between the auditor and the management such as any management letters or schedule of unadjusted differences.
  21. The committee shall perform such other functions as assigned by law, the Company’s charter or bylaws or the Board of Directors.

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.