Attached files
Exhibit 99.6
FORM OF AUDIT COMMITTEE CHARTER
OF
BIG ROCK PARTNERS ACQUISITION CORP.
1.
STATUS
The Audit Committee (the “Committee”) is a committee of
the Board of Directors (the “Board”) of Big Rock
Partners Acquisition Corp. (the
“Company”).
2.
PURPOSE
The Committee is appointed by the Board for the primary purposes
of:
|
●
|
Performing the Board’s oversight responsibilities as they
relate to the Company’s accounting policies and internal
controls, financial reporting practices and legal and regulatory
compliance, including, among other things:
|
|
o
|
the quality and integrity of the Company’s financial
statements;
|
|
o
|
the Company’s compliance with legal and regulatory
requirements as well as compliance with all documents filed by the
Company with the Securities and Exchange Commission (the “
SEC ”); review of the independent auditors’
qualifications and independence; and
|
|
o
|
the performance of the Company’s internal audit function and
the Company’s independent auditors;
|
|
●
|
Maintaining, through regularly scheduled meetings, a line of
communication between the Board and the Company’s financial
management, internal auditors and independent
auditors;
|
|
●
|
Preparing the report to be included in the Company’s annual
proxy statement, as required by the SEC rules; and
|
|
●
|
In the event any noncompliance is identified, immediately taking
all action necessary to rectify such noncompliance or otherwise
cause compliance.
|
3.
COMPOSITION
AND QUALIFICATIONS
The Committee shall be appointed by the Board and shall, within one
year of the listing of the Company’s securities, be comprised
of three or more Directors (as determined from time to time by the
Board), each of whom shall meet the independence requirements of
the Sarbanes-Oxley Act of 2002 (the “Act ”), the Nasdaq
Stock Market LLC and all other applicable laws.
Each member of the Committee shall be financially literate and at
least one member of the Committee shall have past employment
experience in finance or accounting, requisite professional
certification in accounting or any other comparable experience or
background which results in the individual’s financial
sophistication, including being or having been a chief executive
officer, chief financial officer or other senior officer with
financial oversight responsibilities, as each such qualification is
interpreted by the Board in its business judgment. In addition, at
least one member of the Committee shall be an “audit
committee financial expert” as defined in Item 407(d)(5)(ii)
of Regulation S-K.
|
|
|
4.
RESPONSIBILITIES:
The Committee will:
1. Review
and discuss the annual audited financial statements and the
Company’s disclosures under “Management’s
Discussion and Analysis of Financial Condition and Results of
Operations” (“MD&A”) with management and the
independent auditors. In connection with such review, the Committee
will:
|
●
|
Discuss with the independent auditors the matters required to be
discussed by Statement on Auditing Standards No. 61 (as may be
modified or supplemented) and the matters in the written
disclosures required by the applicable requirements of the Public
Company Accounting Oversight Board regarding the independent
accountant’s communications with the audit committee
concerning independence;
|
|
●
|
Review significant changes in accounting or auditing
policies;
|
|
●
|
Review with the independent auditors any problems or difficulties
encountered in the course of their audit, including any change in
the scope of the planned audit work and any restrictions placed on
the scope of such work and management’s response to such
problems or difficulties;
|
|
●
|
Review with the independent auditors, management and the senior
internal auditing executive the adequacy of the Company’s
internal controls, and any significant findings and recommendations
with respect to such controls;
|
|
●
|
Review reports required to be submitted by the independent auditor
concerning: (a) all critical accounting policies and practices
used; (b) all alternative treatments of financial information
within generally accepted accounting principles
(“GAAP”) that have been discussed with management, the
ramifications of such alternatives, and the accounting treatment
preferred by the independent auditors; and (c) any other material
written communications with management;
|
|
●
|
Review (a) major issues regarding accounting principles and
financial statement presentations, including any significant
changes in the Company’s selection or application of
accounting principles, and major issues as to the adequacy of the
Company’s internal controls and any special audit steps
adopted in light of material control deficiencies; and (b) analyses
prepared by management and/or the independent auditor setting forth
significant financial reporting issues and judgments made in
connection with the preparation of the financial statements,
including analysis of the effects of alternative GAAP methods on
the financial statements and the effects of regulatory and
accounting initiatives, as well as off-balance sheet structures, on
the financial statements of the Company; and
|
|
●
|
Discuss policies and procedures concerning earnings press releases
and review the type and presentation of information to be included
in earnings press releases (paying particular attention to any use
of “pro forma” or “adjusted” non-GAAP
information), as well as financial information and earnings
guidance provided to analysts and rating agencies.
|
2. Recommend
to the Board that the annual financial statements and MD&A be
included in the Company’s Form 10-K.
3. Review
and discuss the quarterly financial statements and the
Company’s disclosures provided in periodic quarterly reports
including MD&A with management, the senior internal auditing
executive and the independent auditor.
4. Oversee
the external audit coverage. The Company’s independent
auditors are ultimately accountable to the Committee, which has the
direct authority and responsibility to appoint, retain, compensate,
terminate, select, evaluate and, where appropriate, replace the
independent auditors. In connection with its oversight of the
external audit coverage, the Committee will:
|
●
|
Have authority to appoint and replace (subject to stockholder
approval, if deemed advisable by the Board) the independent
auditors;
|
|
●
|
Have authority to approve the engagement letter and the fees to be
paid to the independent auditors;
|
|
●
|
Pre-approve all audit and permitted non-audit services to be
performed by the independent auditors and the related fees and
terms for such services other than prohibited non-auditing services
as promulgated under rules and regulations of the SEC (subject to
the inadvertent de minimus exceptions set forth in the Act and the
SEC rules);
|
|
●
|
Monitor and obtain confirmation and assurance as to the independent
auditors’ independence, including ensuring that they submit
on a periodic basis (not less than annually) to the Committee a
formal written statement delineating all relationships between the
independent auditors and the Company. The Committee is responsible
for actively engaging in a dialogue with the independent auditors
with respect to any disclosed relationships or services that may
impact the objectivity and independence of the independent auditors
and for taking appropriate action in response to the independent
auditors’ report to satisfy itself of their
independence;
|
|
●
|
At least annually, obtain and review a report by the independent
auditors describing: the firm’s internal quality-control
procedures; any 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 to assess the independent
auditors’ independence, all relationships between the
independent auditors and the Company;
|
|
|
|
|
●
|
Meet with the independent auditors prior to the annual audit to
discuss planning and staffing of the audit;
|
|
●
|
Review and evaluate the performance of the independent auditors, as
the basis for a decision to reappoint or replace the independent
auditors;
|
|
●
|
Set clear hiring policies for employees or former employees of the
independent auditors, including but not limited to, as required by
all applicable laws and listing rules; and
|
|
●
|
Assure regular rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit partner
responsible for reviewing the audit, as required by the Act, and
consider whether rotation of the independent auditor is required to
ensure independence.
|
5. Oversee
internal audit coverage. In connection with its oversight
responsibilities, the Committee will:
|
●
|
Review the appointment or replacement of the senior internal
auditing executive;
|
|
●
|
Review, in consultation with management, the independent auditors
and the senior internal auditing executive, the plan and scope of
internal audit activities;
|
|
●
|
Review internal audit activities, budget and staffing;
and
|
|
●
|
Review significant reports to management prepared by the internal
auditing department and management’s responses to such
reports.
|
6. Review
with the independent auditors and the senior internal auditing
executive the adequacy of the Company’s internal controls,
and any significant findings and recommendations with respect to
such controls.
7. Resolve
any differences in financial reporting between management and the
independent auditors.
8. 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 submission by employees of concerns regarding
questionable accounting or auditing matters.
9. Discuss
policies and guidelines to govern the process by which risk
assessment and risk management is undertaken.
10. Meet
periodically with management to review and assess the
Company’s major financial risk exposures and the manner in
which such risks are being monitored and controlled.
11. Meet
periodically (not less than annually) in separate executive session
with each of the chief financial officer, the senior internal
auditing executive, and the independent auditors.
12. Review
and approve all “related party transactions” requiring
disclosure under Item 404 of Regulation S-K.
13. Review
periodically with the Company’s management, independent
auditors, and legal advisors, as appropriate (i) legal, regulatory
and compliance matters, including any correspondence with
regulators or government agencies and any employee complaints or
published reports which raise material issues on the financial
statements or accounting policies, and (ii) corporate compliance
policies or codes of conduct.
14. Have
the authority, in the Committee’s sole discretion, to retain
and obtain the advice and assistance of independent outside counsel
and such other advisors as it deems necessary to fulfill its duties
and responsibilities under this Charter.
15. Report
regularly to the Board with respect to Committee
activities.
16. Prepare
the report of the Committee required by the rules of the SEC to be
included in the proxy statement for each annual
meeting.
17. Review
and reassess annually the adequacy of this Charter and recommend
any proposed changes to the Board.
18. Monitor
compliance, on a regularly scheduled basis, with the terms of the
Company’s initial public offering (the “Offering
”) and, if any noncompliance is identified, promptly take all
action necessary to rectify such noncompliance or otherwise cause
the Company to come into compliance with the terms of the
Offering.
19. Inquire
and discuss with management the Company’s compliance with
applicable laws and regulations.
20. Determine
the compensation and oversight of the work of the independent
auditor (including resolution of disagreements between management
and the independent auditor regarding financial reporting) for the
purpose of preparing or issuing an audit report or related
work.
21. Review
and approve, on a quarterly basis, all payments made to the
Company’s existing holders, sponsor, executive officers or
directors and their and the Company’s respective
affiliates.
5.
PROCEDURES
1. Action.
A majority of the members of the entire Committee shall constitute
a quorum. The Committee shall act on the affirmative vote of a
majority of the members present at a meeting at which a quorum is
present. Without a meeting, the Committee may act by unanimous
written consent of all members. However, the Committee may delegate
to one or more of its members the authority to grant pre-approvals
of audit and permitted non-audit services, provided the decision is
reported to the full Committee at its next scheduled
meeting.
2. Fees.
The Company shall provide for appropriate funding, as determined by
the Committee, for payment of compensation: (a) to outside legal
accounting or other advisors employed by the Committee; and (b) for
ordinary administrative expenses of the Committee that are
necessary or appropriate in carrying out its duties.
3. Limitations.
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
GAAP. This is the responsibility of management and the independent
auditors.