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Audit Committee Charter

I. Principal Functions and Authority

The principal functions of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Concur Technologies, Inc. (the “Company”) are to:

  • oversee the integrity of the Company’s financial statements and the Company’s compliance with related legal and regulatory requirements;
  • monitor the adequacy of the Company’s accounting and financial reporting, and its internal controls and processes for financial reporting;
  • oversee the Company’s relationship with its independent auditors, including appointing, evaluating and setting the compensation of the independent auditors; and
  • facilitate communication among the independent auditors, the Company’s management, and the Board.

The Committee shall perform these functions primarily by carrying out the activities enumerated in Part IV of this charter. In order to do so, the Committee shall have unrestricted access to Company personnel and documents, and shall have authority to direct and supervise investigations into any matters within the scope of its duties. The Committee shall have the authority to engage outside counsel and other advisors as it determines necessary to carry out its duties. The Company shall provide appropriate funding to the Committee, as determined by the Committee, for payments of compensation to:

  • the independent auditors for audit services, and for any permitted non-audit services approved by the Committee; and
  • any advisors employed by the Committee as provided by this charter.

II. Membership

All members of the Committee shall be appointed by, and shall serve at the discretion of, the Board. Unless a chairman is appointed by the full Board, the members of the Committee may designate a chairman by vote of a majority of the Committee members.

The Committee shall consist of three or more members of the Board, with the exact number being determined by the Board. Each member of the Committee shall be “independent” as defined by the rules of The NASDAQ Stock Market, the United States federal securities laws, and the rules and regulations promulgated thereunder from time to time, except as otherwise permitted by such rules and regulations. Each member of the Committee shall have the ability to read and understand fundamental financial statements and at least one member shall be a “financial expert” (as defined in the Sarbanes-Oxley Act of 2002 and such regulations as may, from time to time, be promulgated thereunder) and have prior experience in accounting, financial management or financial oversight, to the extent required by the rules of The NASDAQ Stock Market, the United States federal securities laws, and the rules and regulations promulgated thereunder from time to time, except as otherwise permitted by such rules and regulations. Each member of the Committee shall perform an annual performance self-evaluation.

III. Meetings

Meetings of the Committee shall be held no less often than quarterly. The Committee should periodically meet with the independent auditors, out of the presence of Company management, to discuss internal controls and procedures, the completeness and accuracy of the Company’s financial statements, and any other matters that the Committee or the independent auditors believe should be discussed privately.

IV. Responsibilities and Duties

In carrying out its oversight responsibilities, the Committee shall perform the activities set forth below, together with such other policies and procedures as the Committee may establish from time to time as it deems necessary or advisable in fulfilling its responsibilities.

A. Oversight of Independent Auditors

The Committee shall:

  1. Appoint, determine the compensation of, and oversee the independence and performance of the independent auditors, which includes the sole authority to appoint and discharge the outside auditors.
  2. Review the performance of the independent auditors as part of its oversight responsibilities, which shall include:
    • reviewing the independent auditors’ overall audit scope and plan; and
    • communicating with the independent auditors about the Company’s expectations regarding its relationship with them, including the independent auditors’ ultimate accountability to the Board and the Committee, as representatives of the Company’s stockholders.
  3. Review and approve processes and procedures to ensure the continuing independence of the independent auditors. These processes shall include:
    • obtaining and reviewing, on at least an annual basis, a letter from the independent auditors describing all relationships between the independent auditors and the Company required to be disclosed by Independence Standards Board Standard No. 1 and reviewing the nature and scope of such relationships and discontinuing any relationships that the Committee believes could compromise the independence of the auditors; and
    • obtaining reports of all non-audit services proposed to be performed by the independent auditors before such services are performed, reviewing and approving or prohibiting, as appropriate, any non-audit services permitted by applicable law, and prohibiting any non-audit services not permitted by applicable law.

B. Financial Reporting

The Committee shall:

  1. Review and discuss the following with Company management:
    • quarterly and annual financial statements and disclosures of the Company prior to their distribution to the public or filing with the Securities and Exchange Commission, including any report or opinion by the independent auditors and disclosures under the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of the Company’s quarterly and annual reports to the Securities and Exchange Commission; and
    • press releases and other public communications regarding Company operating results and business outlook.
  2. In connection with the Committee’s review of the Company’s annual financial statements:
    • discuss with the independent auditors and Company management the financial statements and the results of the independent auditors’ audit of the financial statements; and
    • discuss any items required to be communicated by the independent auditors in accordance with SAS 61, as amended, which should include discussion regarding:
      • the independent auditors’ judgments about the quality and appropriateness of the Company’s accounting principles, the adequacy and effectiveness of its accounting and financial controls (including the Company’s system to monitor and manage business risk) and legal and ethical compliance programs; and
      • the reasonableness of significant judgments, the clarity of the disclosures in the Company’s financial statements and any significant difficulties encountered during the course of the audit (including any restrictions on the scope of work or access to required information).
  3. In connection with the Committee’s review of the Company’s quarterly financial statements:
    • discuss with the independent auditors and Company management the results of the independent auditors’ SAS 71 review of the quarterly financial statements; and
    • discuss significant issues, events and transactions and any significant changes regarding accounting principles, practices, judgments or estimates with Company management and the independent auditors, including any significant disagreements among Company management and the independent auditors.
  4. Review and discuss with the independent auditors all reports delivered to the Company by the independent auditors regarding:
    • critical accounting policies, estimates and practices used by the Company;
    • alternative treatments of financial information within generally accepted accounting principles that have been discussed with Company management, the ramifications of such treatments, and the treatments preferred by such independent auditors; and
    • other material written communications between the independent auditors and Company management, such as any management letter or schedule of unadjusted differences.
  5. Discuss with Company management any comments or recommendations of the independent auditors outlined in their annual management letter, and review any written response of Company management to such management letter.
  6. Discuss with the independent auditors and Company management their periodic reviews of the adequacy and effectiveness of the Company’s accounting and financial reporting processes and systems of internal control, including the adequacy of the systems of reporting to the Committee by each group.
  7. Periodically consult with the independent auditors, out of the presence of Company management, about internal controls, the fullness and accuracy of the Company’s financial statements and any other matters that the Committee or these groups believe should be discussed privately with the Committee.

C. Legal and Regulatory Compliance

The Committee shall:

  1. Review with Company management, at least annually, the Company’s program for promoting and monitoring compliance with applicable legal and regulatory requirements.
  2. Periodically review the status of any legal matters that could have a significant impact on the Company’s financial statements.
  3. Annually prepare a report to the Company’s stockholders for inclusion in the Company’s annual proxy statement as required by the rules and regulations of the Securities and Exchange Commission, as they may be amended from time to time.
  4. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.
  5. Review and approve or prohibit, as appropriate, any proposed related-party transactions with the Company.
  6. Periodically review the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.

D. Committee Governance

The Committee shall:

  1. Maintain minutes of meetings and periodically report to the Board of Directors on significant matters related to the Committee’s responsibilities.
  2. Review and reassess the adequacy of the Committee’s charter at least annually. Submit the charter to the Company’s Board of Directors for review and include a copy of the charter as an appendix to the Company’s annual proxy statement as required by the rules and regulations of the Securities and Exchange Commission, as they may be amended from time to time (currently, once every three years).

Other Activities

The Committee shall perform any other activities as may be required by applicable law, rules or regulations, including the rules of the Securities and Exchange Commission and any stock exchange or market on which the Company’s common stock is listed, and perform other activities that are consistent with this charter, the Company’s certificate of incorporation and bylaws and governing laws, as the Committee or the Board deems necessary or appropriate.

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