Audit Committee Charter
The Audit Committee (the "Committee") is appointed by the Board
of Directors (the "Board") of Crawford & Company (the
"Company") to assist the Board in monitoring (1) the integrity of
the financial statements of the Company, (2) the compliance by the
Company with legal and regulatory requirements, (3) the independent
auditor's qualifications and independence and (4) the performance
of the Company's internal audit function and independent
The members of the Audit Committee shall be directors who meet
the independence and experience requirements of the Sarbanes-Oxley
Act of 2002, the rules promulgated by the Securities and Exchange
Commission and the listing standards of the New York Stock
Exchange. No member of the Committee may serve on the audit
committee of more than three public companies. All Committee
members will be financially literate, and at least one member of
the Committee will have accounting or related financial management
expertise, as each such qualification is interpreted by the Board
in its business judgment.
Structure and Meetings
The Committee shall meet at least quarterly. Unless a
Chair is elected by the full Board, the members of the Committee
may designate a Chair by majority vote of the Committee.
Committee members may be removed from the Committee by the Board in
its discretion. The Committee may request any officer or
employee of the Company or the Company's independent auditor to
attend a meeting of the Committee or to meet with any members of,
or consultants to, the Committee. The Committee shall have
authority to retain such outside counsel, experts and other
advisors as the committee may deem appropriate in its sole
discretion. The committee shall have sole authority to approve
related fees and retention terms.
The Committee shall:
- Be directly responsible for the appointment, compensation and
oversight of the work of the independent auditor, which shall
report directly to the Committee, including resolution of
disagreements, if any, between management and the independent
auditor regarding financial reporting.
- Receive periodic reports from the independent auditor regarding
the auditor's independence, discuss such reports with the auditor,
and if so determined by the Committee, take appropriate action to
ensure the independence of the auditor.
- Obtain and review annually a report by the independent auditor
describing (1) the independent auditor's quality-control
procedures; (2) material issues raised by the most recent internal
quality-control review, or peer review, of the firm, or by any
inquiry or investigation by governmental or professional
authorities, within the preceding five years, respecting one or
more independent audits carried out by the firm, and any steps
taken to deal with any such issues; and (3) to further assess the
auditor's independence, all relationships between the independent
auditor and the Company.
- In light of the reports referred to above and the independent
auditor's work throughout the year, evaluate the qualifications,
performance and independence of the independent auditor, including
a review and evaluation of the lead partner of the independent
auditor, taking into account the opinions of Company management and
the Company's internal audit personnel, and, if so determined by
the Committee, replace the independent auditor.
- Annually examine whether regular rotation of the audit partners
of the Company's independent auditor has occurred as required by
- Discuss with the independent auditor the matters required to be
discussed by Statement on Auditing Standards No. 61 relating to the
conduct of the audit.
- Establish policies and procedures for the engagement of the
independent auditor to provide permissible non-audit services,
which shall include pre-approval of permissible non-audit services
to be provided by the independent auditors. The Committee
shall approve in advance all permissible non-audit services to be
provided by the independent auditors.
- Meet with the independent auditor prior to the audit to review
the planning and staffing of the audit.
- Obtain from the independent auditor assurance that Section 10A
of the Securities Exchange Act of 1934, as amended, has not been
- Annually review with the independent auditor any problems or
difficulties the auditor may have encountered and any management
letter provided by the auditor and the Company's response to that
letter. Such review should include:
- any restrictions on the scope of the independent auditor's
activities or on access to requested information,
- any significant disagreements with management,
- any accounting adjustments that were noted or proposed by the
auditor but were "passed" (as immaterial or otherwise),
- any communications between the audit team and the audit firm's
national office respecting auditing or accounting issues presented
by the engagement,
- any changes required in the planned scope of the internal
- the internal audit department responsibilities, budget and
- Review and discuss the Company's (A) annual audited
financial statements, (B) quarterly unaudited financial statements,
(C) Annual Reports on Form 10-K and (D) Quarterly Reports on Form
10-Q with management and the independent auditor, such discussions
- major issues regarding accounting and auditing principles and
- the adequacy of internal controls that could significantly
affect the Company's financial statements,
- an analysis prepared by management and the independent auditor
of significant financial reporting issues and judgments made in
connection with the preparation of the Company's financial
statements, including analysis of the effects of alternative GAAP
- the Company's disclosures under "Management's Discussion and
Analysis of Financial Condition and Results of Operations,"
- the effect of regulatory and accounting initiatives, as well as
off-balance sheet structures, on the financial statements of the
- Discuss the Company's earnings press releases, as well as
financial information and earnings guidance provided to analysts
and rating agencies. These discussions may be had
generally and need not include advance discussion of each earnings
release. Discussions will include the type and presentation
of information to be included in earnings press releases, with
particular attention to any use of pro forma or adjusted non-GAAP
- Review major changes to the Company's auditing and accounting
principles and practices as suggested by the independent auditor,
internal auditors or management.
- Prepare the report required by the rules of the Securities and
Exchange Commission to be included in the Company's annual proxy
- Review the appointment of the senior internal auditing
- Review the significant reports to management prepared by the
internal auditing department and management's responses.
- Discuss guidelines and policies to govern the process by which
risk management and assessment is handled, and meet periodically
with management to review the Company's major financial risk
exposures and the steps management has taken to monitor and control
- Meet separately, at least annually, with management, the
internal auditors (or other personnel responsible for the Company's
internal audit function) and the independent auditors.
- Report regularly to the Board of Directors.
- Review and discuss with management, the internal auditors, and
the independent auditors the adequacy and effectiveness of the
Company's legal, regulatory and ethical compliance programs.
- Set policies for the Company's hiring of employees or former
employees of the Company's independent auditor.
- Establish procedures for (i) the receipt, retention and
treatment of complaints received by the Company regarding
accounting, internal accounting controls or auditing matters and
(ii) the confidential, anonymous submissions by Company employees
of concerns regarding questionable accounting or auditing
- Request that the Company file this Charter as an appendix to
the Proxy Statement at least once every three years and maintain a
copy on the Company's website.
- Review and assess the adequacy of this Charter annually and
submit it to the Board for approval.
- Evaluate the performance of the Committee annually.
While the Committee has the responsibilities and powers set
forth in this Charter, it is not the duty of the Committee to plan
or conduct audits or to determine that the Company's financial
statements are complete and accurate and are in accordance with
generally accepted accounting principles. This is the
responsibility of management and the independent auditor.