AUDIT COMMITTEE CHARTER
(adopted May 23, 2000)
The Audit Committee (the “Committee”) of the Board of Directors of
Hickok Incorporated (the “Company”) is currently comprised of two
directors. Each director is an “independent director,” as such term is
defined by the National Association of Securities Dealers, Inc. (an
“Independent Director”). By June 1, 2001, the Committee shall be
comprised of a minimum of three directors. Except as provided below,
each director shall be an Independent Director. Each member of
the Committee shall be able to read and understand fundamental
financial statements or will become able to do so within a reasonable
period of time after appointment to the Committee. By June 1, 2001, the
Committee shall include at least one member that has past employment
experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or
background that results in the individual's financial sophistication.
Statement of Policy
The Committee shall provide assistance to the directors in
their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting
practices of the Company, and the quality and integrity of financial
reports of the Company. In so doing, it is the responsibility of the
Committee to maintain free and open communication between the
directors, the independent auditors, the internal auditors, and
the financial management of the Company.
In carrying out its responsibilities, the Committee believes its
policies and procedures should remain flexible, in order to best
react to changing conditions and to facilitate corporate accounting and
reporting practices of the Company that are in accordance with all
applicable requirements and that are of the highest quality.
In carrying out these responsibilities,
the Committee will:
- Obtain the full Board of Directors’ approval of this Charter and
review and reassess the adequacy of this Charter as conditions dictate
(at least annually).
- Review and recommend to the directors the independent auditors
to be selected to audit the financial statements of
the Company and its divisions and subsidiaries.
- Have a clear understanding with the independent auditors that
they are ultimately accountable to the Board of
Directors and the Committee, as the shareholders’ representatives,
who have the ultimate authority and responsibility to select,
evaluate, and, where appropriate, replace the independent auditor (or
to nominate the independent auditor to be proposed for shareholder
approval in any proxy statement).
- Meet with the independent auditors and financial management of
the Company to review the scope of the proposed audit and timely
quarterly reviews for the current year and the procedures to be
utilized, the adequacy of the independent auditor’s compensation, and
at the conclusion thereof review such audit or review, including any
comments or recommendations of the independent auditors.
- Review with the independent auditors, and financial and
accounting personnel, the adequacy and effectiveness of the accounting
and financial controls of the Company, and elicit any recommendations
for the improvement of such internal controls or particular areas where
new or more detailed controls or
procedures are desirable. Particular emphasis should be given to the
adequacy of internal controls to expose any payments, transactions, or
procedures that might be deemed illegal or otherwise improper.
- Review reports received from regulators and other legal and
regulatory matters that may have a material effect on the financial
statements or related Company compliance policies.
- Inquire of management and the independent auditors about
significant risks or exposures and assess the steps management has
taken to minimize such risks to the Company.
- Review the quarterly financial statements with financial
management and the independent auditors prior to the filing of the Form
10-Q (or prior to the press release of results,
if possible) to determine that the independent auditors do not
take exception to the disclosure and content of the financial
and discuss any other matters required to be communicated to the
Committee by the auditors. The chair of the Committee may represent the
entire Committee for purposes of this review.
- Review the financial statements contained in the annual report
to shareholders with management and the independent auditors to
determine that the independent auditors are satisfied with the
disclosure and content of the financial statements to be presented to
the shareholders. Review with financial management and the independent
auditors the results of their timely analysis of significant financial
reporting issues and practices, including changes in, or adoptions of,
accounting principles and disclosure practices, and discuss any other
matters required to be communicated to the Committee by the auditors.
Also review with financial management and the independent auditors
their judgments about the quality, not just acceptability, of
accounting principles and the clarity of the financial disclosure
practices used or proposed to be used, and particularly, the degree of
aggressiveness or conservatism of the Company’s accounting principles
and underlying estimates, and other significant decisions made in
preparing the financial statements.
- Provide sufficient opportunity for the independent auditors to
meet with the members of the Committee without members of management
present. Among the items to be discussed in these meetings are the
independent auditors’ evaluation of the Company’s financial,
accounting, and auditing personnel, and the cooperation that the
independent auditors received during the course of audit.
- Report the results of the annual audit to the
Board of Directors. If requested by the Board of Directors,
invite the independent auditors to attend the full Board of Directors
meeting to assist in reporting the results of the annual audit or to
answer other directors’ questions (or alternatively, the
other directors, particularly the other independent directors, may
be invited to attend the Committee meeting during which the results
of the annual audit are reviewed).
- On an annual basis, obtain from the independent auditors a
written communication delineating all their relationships and
professional services as required by Independence Standards Board
Standard No. 1, Independence Discussions with Audit Committees. In
addition, review with the independent auditors the nature and scope of
any disclosed relationships or professional services and take, or
recommend that the Board of Directors take, appropriate action to
oversee the continuing independence of the auditors.
- Submit the minutes of all meetings of the Committee to, or
discuss the matters discussed at each Committee meeting with, the Board
- Investigate any matter brought to its attention within the scope
of its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
- Review the Committee’s report, containing the
information required to be stated therein by rules of the
Securities and Exchange Commission, to be set forth in the
proxy statement for the Company’s annual meeting of shareholders,
and review other Company disclosure relating to the Committee required
to be set forth in such proxy statements. This Charter shall be
filed as an appendix to the proxy statement at least once
every three years.