Audit Committee Charter
The Board of Directors of John Wiley & Sons, Inc. (the "Company") has established an Audit Committee (the "Committee") with authority, responsibility and specific duties as described in this charter. The Committee shall review and reassess the adequacy of this charter at least annually and report its conclusion and any recommendations to the Board of Directors.
The Committee assists the Board of Directors in fulfilling its fiduciary oversight responsibilities relating to the Company's financial statements, accounting policies, the adequacy of disclosures, the Company's compliance with legal and regulatory requirements, the financial reporting process, the systems of internal accounting and financial controls, and the sufficiency of auditing relative thereto. The Committee also maintains financial oversight of the Company's retirement and other benefit plans.
The Committee is responsible for evaluating the quality, independence and objectivity of the independent auditors and internal auditors. It is the responsibility of the Committee to maintain free and open communication between the Committee, independent auditors, the internal auditors and management of the Company. The opportunity for the independent auditors and the internal auditors to meet with the entire Board of Directors is not to be restricted. The Committee is to ensure that the independent auditors are ultimately accountable to it. The Committee has the ultimate authority and responsibility to evaluate and appoint the independent auditors, determine their compensation and, if appropriate, to terminate the independent auditors.
In discharging its oversight role, the Committee is granted the authority to investigate any activity of the Company and its subsidiaries, and all employees shall be directed to cooperate as may be requested by members of the Committee. If the Committee determines that additional expertise is required in order to fulfill its responsibilities, the Committee is empowered to retain and compensate persons or firms as necessary to assist the Committee in fulfilling its responsibility.
The Committee shall consist of three or more Directors appointed by the Board upon the recommendation of the Governance Committee. All Committee members must be independent of management and the Company and shall be financially literate in accordance with the applicable SEC and NYSE regulations and policies. At least one member of the Committee shall, in the judgment of the Board, be a "Financial Expert" as the term is defined by the SEC. Consistent with the Company's policy for all directors, Committee members receive no compensation from the Company, except for retainer fees and reimbursement of expenses in connection with Board and Committee service. No member of the Committee may serve on the Audit Committee of more than two other public companies unless the Board, upon the recommendation of the Governance Committee, determines that such simultaneous service would not impair the director's ability to serve effectively on the Committee and such determination is disclosed in the Company's annual proxy statement.
The Committee will meet at least four times each fiscal year, with additional meetings as necessary to fulfill its responsibilities. At each regularly scheduled quarterly meeting and otherwise, as it deems necessary, the Committee shall meet privately (either separately or in combination at the Committee's determination) with representatives of the independent auditors, the head of Internal Audit, the Chief Executive Officer, the Chief Financial Officer, the Controller, the General Counsel and other members of management, as appropriate.
The following are the principal recurring duties of the Committee:
- Request from the independent auditors at least annually a formal written statement delineating all relationships between the independent auditors and the Company consistent with Independent Standards Board Standard No. 1, as may be modified or supplemented; discuss with the independent auditors any such disclosed relationships, including non-audit services, and their impact on the auditors' independence; and take action, if appropriate, in response to the independent auditors' statement in order to satisfy itself of the auditors' independence.
- Select and retain the services of the Company's independent auditor, which will be subject to the shareholders' ratification, and terminate their services when appropriate.
- Review the scope and results of the annual audit with the independent auditor.
- Review significant changes in accounting principles, any significant disagreements between management and the independent auditors and other significant matters in connection with the preparation of the Company's financial statements, and receive required reports from the independent auditors.
- Receive annually a report from the independent auditors describing (a) the independent auditors' internal quality-control procedures; and (b) any material issues raised by the most recent internal quality-control review, 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 independent auditors, and any steps taken to deal with such issues.
- Establish policies and procedures for the pre-approval of audit and permissible non-audit services to be provided by the independent auditors and approve in advance all audit and permissible non-audit services to be provided by the independent auditors.
- Establish policies for the Company's hiring of employees and former employees of the independent auditor.
- Review and discuss with the internal auditors the overall scope and plans for their audits and determine whether the internal audit function has the appropriate resources and expertise.
- Review and discuss with management, the internal auditors, and the independent auditors, the adequacy and effectiveness of the Company's internal accounting and financial controls, the quality of the financial and accounting personnel, and any relevant recommendations and management's responses thereto.
- (a) Review and discuss with management and the independent auditor the Company's financial risk exposures and the policies and processes management has implemented to monitor and control such exposures; (b) assist the Board in fulfilling its oversight responsibilities regarding the Company's policies and processes with respect to risk assessment and risk management, including any significant non-financial risk exposures; and (c) review the Company's annual disclosures concerning the role of the Board in the risk oversight of the Company, such as how the Board administers its oversight function.
- Make, or cause to be made, all necessary inquiries of management, the independent auditors and the internal auditors concerning established standards of corporate conduct and performance and deviations there from. Annually, a report relative to compliance with the Company's code of business conduct is to be furnished to the Committee.
- Establish procedures for the confidential and anonymous receipt, review and treatment of complaints regarding the Company's accounting, internal controls, audit matters and business conduct in accordance with the Business Conduct and Ethics Policy.
- Review, approve or ratify related person transactions involving Directors, Director Nominees or the Chief Executive Officer in accordance with the Company's Policy on Related Party Transactions. Receive a report from the Chief Executive Officer of any action he has taken with respect to related party transactions involving an executive officer or an immediate family member of an executive officer.
- Meet with management and the independent auditors prior to the filing of the Company's Quarterly Reports on Form 10-Q to review and discuss the interim financial statements and the Company's specific disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations." Also, the Committee shall discuss the results of the quarterly review and any other matters that are required to be communicated to the Committee by the independent auditors in accordance with Statement on Auditing Standards No. 61, as modified or supplemented.
- Review and discuss quarterly earnings press releases.
- Meet with management and the independent auditors to review and discuss the financial statements and the Company's specific disclosures under "Management's Discussion and Analysis of Financial Condition and Results of Operations" to be included in the Company's Annual Report on Form 10-K, including their judgment about the quality, not just acceptability, of accounting principles, the consistency of accounting policies, unusual transactions, the reasonableness of significant estimates and judgments, the clarity and completeness of the disclosures in the financial statements, and any other matters required to be discussed by the Statement on Auditing Standards No. 61, as modified or supplemented. Also, the Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the independent auditors, including any disagreements with management.
- Recommend to the Board of Directors whether the audited financial statements are satisfactory to be included in the Company's Annual Report on Form 10-K.
- Review and reassess, at least annually, the adequacy of this charter and report its conclusion and any recommendations to the Board of Directors.
- Prepare an annual report for inclusion in the Company's annual proxy statement as required by the rules of the Securities and Exchange Commission.
- Review its own performance annually and report to the Board.
- Review and evaluate the financial condition of the Company's retirement and other benefit plans.
- Report regularly to the full Board on the Committee's findings and recommendations, including any issues with respect to the quality or integrity of the Company's financial statements, the Company's compliance with legal or regulatory requirements, the performance and independence of the independent auditors, the performance of the internal audit function, or any other matter the Committee deems appropriate or the Board requests.
Approved by the Board of Directors
John Wiley & Sons, Inc.
September 15, 2011