Investor Relations

Audit Committee

Audit Committee

CHARTER FOR THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF CRA INTERNATIONAL, INC.

Amended and Restated Effective December 4, 2020

Purpose:

The purpose of the Audit Committee (the "Committee") established pursuant to this Charter is to perform general oversight of the accounting and financial reporting processes of CRA International, Inc. and its subsidiaries (the "Company") and the audits of the financial statements of the Company. The Committee shall assist the Board of Directors (the "Board") of the Company in fulfilling its oversight responsibilities relating to (a) the quality and integrity of the Company's financial statements and other financial reports, (b) the Company's system of internal accounting controls, (c) the performance, independence and qualifications of the Company's internal controls function (all references in this Charter to the internal controls department or internal controls function shall include, as applicable, any co-source or outsource internal controls firm) and independent registered public accountants and (d) the Company's compliance with legal and regulatory requirements.

In addition, the Committee shall have the authority to undertake the specific duties and responsibilities listed below and the authority to undertake such other specific duties as the Board from time to time may prescribe. In carrying out its responsibilities, the Audit Committee believes that the policies and procedures delineated in this Charter should remain flexible, in order to react best to changing business and regulatory requirements.

Membership:

The Committee shall consist of at least three (3) members of the Board. The members of the Committee shall be appointed by, and shall serve at the discretion of, the Board. All members of the Committee shall meet the independence, financial literacy and other requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the listing standards of The Nasdaq Stock Market, Inc. ("Nasdaq") and related rules and regulations. At least one member of the Committee shall qualify as an audit committee financial expert within the meaning of the Exchange Act and the rules and regulations adopted thereunder.

Unless a chairperson (the “Chairperson”) is elected by the full Board, the members of the Committee shall designate a Chairperson by majority vote of the full Committee membership. The Chairperson shall be entitled to cast a vote to resolve any ties. The Chairperson shall chair all regular sessions of the Committee and set the agenda for the Committee meetings.

Responsibility With Respect to Independent Registered Public Accountants:

The Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company ("independent registered public accountants"). The Company’s independent registered public accountants shall report directly to the Committee. The Committee shall have the authority and responsibility to select, evaluate the performance of and, where appropriate, replace the independent registered public accountants.

Additional Specific Responsibilities:

In addition to, and in furtherance of, the foregoing responsibilities, the Committee shall have the following duties and responsibilities:

  1. Reviewing on a continuing basis the adequacy of the Company's system of internal controls over financial reporting including information technology security and controls, policies and procedures and approving policies relating to internal controls and protection of assets;
  2. Reviewing on a continuing basis the activities, organizational structure, staffing and outsourcing, and qualifications of the Company's internal controls function (when applicable);
  3. Reviewing and approving the annual internal controls plan;
  4. Prior to the annual independent audit, reviewing with the independent registered public accountants and management the independent registered public accountants’ proposed audit scope and approach and the areas of audit emphasis;
  5. Reviewing and discussing reports from the independent registered public accountants concerning (a) all critical accounting policies and practices including significant estimates and judgments used by the Company, (b) alternative accounting treatments within generally accepted accounting principles related to material items that have been discussed with management, including the ramifications of the use of the alternative treatments and the treatment preferred by the independent registered public accountants, and (c) other material written communications between the independent registered public accountants and management;
  6. Reviewing with the independent registered public accountants their judgments as to the quality, not just the acceptability, of the Company's accounting principles and such matters as are required to be discussed with the Committee under generally accepted auditing standards;
  7. Reviewing and discussing with management and the independent registered public accountants the Company's annual audited financial statements and quarterly financial statements, including the results of any audit or review of those financial statements and the disclosures in management's discussion and analysis of the Company's financial condition and results of operations prior to filing or distribution; conducting a post-audit review of the audit findings (including any significant suggestions for improvements provided to management by the independent registered public accountants), the form and content of the Company's financial statements and disclosures and the required communications from the independent registered public accountants under generally accepted auditing standards and any applicable Securities and Exchange Commission ("SEC") regulations;
  8. Reviewing and discussing with management and the independent registered public accountants the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, quarterly and annual earnings press releases and information prepared by the Company for its regular public conference telephone calls concerning its earnings and results of operations in the context of information provided to the Audit Committee and the Board. Periodically, discussing with management their approach to earnings press releases and the type of financial information and earnings guidance provided to analysts and rating agencies (paying particular attention to any use of “pro forma,” or “adjusted” non-GAAP, information);
  9. If deemed appropriate, recommending to the Board that the audited financial statements be included in the Annual Report on Form 10-K for the year;
  10. Meeting to review and discuss disclosures made to the Committee by the Company's Chief Executive Officer and Chief Financial Officer during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company's internal controls;
  11. Prior to the initial engagement of an independent registered public accounting firm and on an annual basis thereafter the Committee shall ensure receipt from the independent registered public accountants of a formal written statement delineating all relationships between the independent registered public accountants and the Company, consistent with the Public Company Accounting Oversight Board Rule 3526 or any other applicable rules, actively engaging in a dialogue with the independent registered public accountants with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accountants and taking, or recommending that the Board take, appropriate action to oversee the independence of the independent registered public accountants. Ensuring lead audit partner and review partner rotation;
  12. Establishing policies and procedures for the review and pre-approval by the Committee of all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent registered public accountants, with exceptions for de minimis activities and amounts under certain circumstances as described by law;
  13. Overseeing compliance with SEC requirements for disclosure of independent registered public accountants’ services and Committee members' activities;
  14. Obtaining at least annually and reviewing a report by the independent registered public accountants describing the independent registered public accountants' internal quality control procedures, any material issues raised by the most recent internal quality review or peer review of the independent registered public accountants or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits conducted by the independent registered public accountants and any steps taken to deal with any such issues;
  15. Reviewing the Company's hiring policies for employees or former employees of the independent registered public accountants that comply with applicable SEC regulations;
  16. Receiving and reviewing reports from inside and outside counsel, regulators and others regarding legal, regulatory and other matters that could have a material effect on the financial statements or related Company compliance policies;
  17. Providing oversight and review of the Company's asset management policies, including an annual review of the Company's investment policies and performance for cash and short-term investments, and approving such policies;
  18. Inquiring of management and the independent registered public accountants about significant risks or exposures, including, but not limited to, financial, operational and compliance risks, and assessing the steps management has taken to minimize such risks to the Company;
  19. Instituting, if necessary, special investigations and, if appropriate, hiring special counsel or experts to assist;
  20. Reviewing related party transactions (as such term is defined in the Nasdaq listing requirements) for potential conflict of interest situations and, if appropriate, providing approval or rejection of such transactions;
  21. Reviewing with senior management and the independent registered public accountants the Company's accounting and financial personnel resources;
  22. Reviewing the responsiveness of management to correcting audit-related deficiencies;
  23. Reviewing, and overseeing the resolution of, any dispute between management and the independent registered public accountants and, if appropriate, making recommendations with respect thereto to the Board;
  24. Establishing procedures for receipt, retention and treatment of complaints received by the Company regarding accounting, internal controls over financial reporting, or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters;
  25. Reviewing the implementation of the Code of Business Conduct and Ethics (the “Code”) and the Company’s process to monitor compliance with the Code;
  26. Preparing the report of the Committee required by the rules of the SEC to be included the Company's proxy statement;
  27. Performing other oversight functions as requested by the full Board; and
  28. Reviewing the effect of regulatory and accounting pronouncements, as well as off-balance sheet structures (if any) on the financial statements of the Company.

In addition to the above responsibilities, the Committee shall undertake such other duties as the Board delegates to it, and shall report, at least annually, to the Board regarding the Committee's examinations, actions and recommendations.

Meetings:

The Audit Committee shall hold meetings at least four times annually, or more frequently as deemed necessary or desirable by the Chair of the Audit Committee. Each meeting shall include an executive session that will allow the Committee to maintain free and open communications with the Company's independent registered public accountants, management and the Company’s internal controls function.

The Committee shall meet separately with the Chief Executive Officer and separately with the Chief Financial Officer of the Company at least annually to review the financial affairs of the Company. The Committee shall meet with the independent registered public accountants of the Company, at such times as it deems appropriate, to review the independent registered public accountants' examination and management report.

The Committee is authorized, by majority vote or unanimous written consent of its members, to adopt its own rules of procedure, including the formalities of calling, noticing and holding meetings and for the taking of action of the Committee by vote at any such meeting or by unanimous written consent of the members thereof. Unless and until any such procedures are formally adopted by the Committee, the procedures with respect to calling, noticing and holding meetings of the Committee and conducting business of the Committee shall be the same as those provided in the By-laws of the Company with respect to calling, noticing and holding meetings of and taking action by the Board.

Reports:

The Committee may present its reports or recommendations to the Board in written or oral form. The Committee's recommendations shall be incorporated as a part of the minutes of the Board meeting at which those recommendations are presented.

Minutes:

The Committee will maintain written minutes of its meetings, which minutes will be filed with the minutes of the meetings of the Board.

Other:

The Committee, in its sole discretion, shall have the right, as and when it shall determine to be necessary or appropriate to the functions of the Committee:

  1. at the Company's expense and not at the expense of the members thereof, to retain independent counsel (which may be, but need not be, the regular corporate counsel to the Company) and other advisors to assist it in connection with its functions;
  2. at the Company's expense and not at the expense of the members thereof, to incur ordinary administrative expenses that are necessary or appropriate in carrying out its duties; and
  3. to request, and to rely upon, advice, orally or in writing, from the Chief Executive Officer and the Chief Financial Officer of the Company and from any representative of the independent registered public accountants to the Company participating in such independent registered public accountants' engagement by the Company, concerning aspects of the operation or financial condition of the Company relevant to the functions.

The officers of the Company are requested to cooperate with the Committee and to render assistance to it as it shall request in carrying out its functions.

Limitation of Audit Committee Responsibility:

In adopting this Charter, the Board acknowledges that it is not the responsibility of the Committee to prepare the Company's financial statements, plan or conduct audits of those financial statements, or determine whether those financial statements are complete and accurate and conform to generally accepted accounting principles and applicable rules and regulations. These tasks are the responsibility of management and the Company's independent registered public accountants.

Delegation:

To the extent permitted by law, the Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Committee.

Annual Reviews:

The Committee will review and reassess the adequacy of this Charter on at least an annual basis and will report to the Board the results of such review and reassessment. At least annually, the Committee will conduct an evaluation of its performance to determine whether it is functioning effectively.

Richard D. Booth Robert W. Holthausen Nancy Hawthorne
  • Member
  • Chair
  • Financial Expert
  • Independent Director