0% found this document useful (0 votes)
29 views6 pages

DOCN Audit Committee Charter

The document outlines the charter of the audit committee of the board of directors of DigitalOcean Holdings, Inc. It establishes the purpose, composition, authority, and responsibilities of the audit committee, including overseeing the accounting and financial reporting processes, auditors, and reviewing annual and quarterly financial statements.

Uploaded by

John Peter
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
29 views6 pages

DOCN Audit Committee Charter

The document outlines the charter of the audit committee of the board of directors of DigitalOcean Holdings, Inc. It establishes the purpose, composition, authority, and responsibilities of the audit committee, including overseeing the accounting and financial reporting processes, auditors, and reviewing annual and quarterly financial statements.

Uploaded by

John Peter
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

DIGITALOCEAN HOLDINGS, INC.

CHARTER OF THE AUDIT COMMITTEE


OF THE BOARD OF DIRECTORS

APPROVED BY THE BOARD OF DIRECTORS


FEBRUARY 17, 2021

PURPOSE

The purpose of the Audit Committee (the “Committee”) of the Board of Directors of DigitalOcean
Holdings, Inc. (the “Company”) is to:

• oversee the Company’s accounting and financial reporting processes, systems of internal
control, financial statement audits and the integrity of the Company’s financial statements;

• manage the selection, engagement terms, fees, qualifications, independence, and performance
of the registered public accounting firms engaged as the Company’s independent outside
auditors for the purpose of preparing or issuing an audit report or performing audit services
(the “Auditors”);

• maintain and foster an open avenue of communication with the Company’s management,
internal audit group and Auditors;

• review any reports or disclosures required by applicable law and stock exchange listing
requirements;

• oversee the design, implementation, organization and performance of the Company’s internal
audit function;

• help the Board oversee the Company’s data security, information technology use and protection
and legal and regulatory compliance, including risk assessment; and

• provide regular reports and information to the Board.

COMPOSITION

The members of the Committee, including the Chairperson, will be members of the Board
appointed by, and will serve at the discretion of, the Board. Vacancies occurring on the Committee will be
filled by the Board. Resignation or removal of a Committee member from the Board for any reason will
automatically constitute resignation or removal from the Committee.

Following the date on which the Company becomes a public reporting company subject to the
periodic reporting requirements of the Securities Exchange Act of 1934, as amended (the “Public Effective
Date”):

• the Committee will consist of at least three members of the Board;

• each member of the Committee will satisfy:

o the independence, financial literacy and other requirements imposed by applicable law

1
and stock exchange listing requirements; and

o any other qualifications determined by the Board; and

• at least one member of the Committee will satisfy the applicable financial-sophistication
requirements and any other requirement for accounting or related financial management
expertise required by applicable law and stock exchange listing requirements.

AUTHORITY

The Committee will have access to all Company books, records, facilities and personnel as deemed
necessary or appropriate by any member of the Committee. If the Committee concludes that it must retain
legal, accounting or other outside advisors, it may do so and determine compensation for those advisors at
the Company’s expense. The Committee may also pay any ordinary administrative expenses it deems
appropriate in carrying out its duties at the expense of the Company. The Committee will have authority to
require that any of the Company’s personnel or outside advisors attend any meeting of the Committee or
meet with any member of the Committee or any of its advisors.

The Chairperson shall have the delegated authority to act on behalf of the Committee (1) as
provided in the Audit Committee Pre-approval Policy and (2) as may otherwise be determined by the
Committee. The Committee also may form and delegate authority to one or more subcommittees consisting
of one or more members of the Board to the extent allowed under applicable law and stock exchange listing
requirements. By delegating an issue to the Chairperson or a subcommittee, the Committee does not
surrender any authority over that issue. Any action or decision of the Chairperson or a subcommittee will
be presented to the full Committee at its next scheduled meeting. By approving this Charter, the Board
delegates authority to the Committee with respect to these responsibilities.

RESPONSIBILITIES

The Committee’s responsibilities are for oversight, as described under “Purpose” above. The
members of the Committee are not employees of the Company, and they do not perform management’s or
any Auditors’ functions. The Committee relies on the expertise and knowledge of management, the internal
auditors, and any Auditors in carrying out its oversight responsibilities. Management is responsible for
preparing accurate and complete financial statements in accordance with generally accepted accounting
principles (“GAAP”), crafting periodic reports, and establishing and maintaining appropriate accounting
principles and financial reporting policies and satisfactory internal control over financial reporting. The
Auditors will audit the Company’s annual consolidated financial statements and, when required, the
effectiveness of the Company’s internal control over financial reporting and review the Company’s
quarterly financial statements. It is not the Committee’s responsibility to prepare or certify the Company’s
financial statements, guarantee the audits or reports of the Auditors, certify as to whether any Auditors are
“independent” under applicable law or stock exchange listing requirements, or ensure that the financial
statements or periodic reports are complete and accurate, conform to GAAP, or otherwise comply with
applicable law or stock exchange listing requirements or the Company’s policies.

Following the Public Effective Date, the Committee shall have the following responsibilities, some
of which it may assume prior to such date in its discretion; provided, however, that this list of
responsibilities is intended to be a guide and to remain flexible to account for changing circumstances and
needs. Accordingly, the Committee may depart from or supplement such responsibilities, and establish
policies and procedures, to the extent permitted by applicable law and stock exchange listing requirements.

Auditor Management:

2
1. Hiring and Selecting Auditors. The Committee will evaluate, determine whether to retain, and
determine the fees of any Auditors and any other registered public accounting firm engaged for the financial
reporting process. In addition, the Committee may replace any existing Auditors or other registered public
accounting firm engaged for the financial reporting process with a different public accounting firm.

2. Approving Audit and Non-Audit Engagements. The Committee will review audit plans, the
adequacy of staffing, the fees to be paid to Auditors, and oversee the negotiation and execution of any
engagement letters on behalf of the Company. The Committee will oversee the rotation of the Auditors’
partners on the Company’s audit engagement team as required by applicable law and stock exchange listing
requirements. The Committee will approve all audit and non-audit related services that the Auditors
provide to the Company before the engagement begins, unless applicable law and stock exchange listing
requirements allow otherwise. The Committee may establish pre-approval policies and procedures or
delegate pre-approval authority to one or more Committee members as permitted by applicable law and
stock exchange listing requirements.

3. Auditor Independence. At least annually, the Committee will assess the qualifications,
performance, and independence of the Auditors, or in the case of prospective Auditors, before they are
engaged. That assessment will include reviewing written disclosures from any Auditors regarding any
relationships they have that may affect independence, as defined by applicable law and stock exchange
listing requirements. The Committee will review a written statement from any Auditors affirming their
independence, and assess, consider, and discuss with them any potential relationships concerning their
objectivity and independence.

4. Former Employees of Auditors. The Committee will oversee the policies and procedures as
required by applicable law and stock exchange listing requirements governing how the Company may
employ individuals who are or once were employed by the Auditors.

Financial Review and Disclosure:

5. Annual Audit Results. The Committee will review with management and the Auditors the results
of the Company’s annual financial statement audit, including:

• the Auditors’ assessment of the quality of the Company’s accounting principles and practices;

• the Auditors’ views about qualitative aspects of the Company’s significant accounting practices
and the reasonableness of significant judgments and estimates (including material changes in
estimates and analyses of the effects of alternative GAAP methods on the financial statements);

• all known and likely misstatements identified during the audit (other than those the Auditors
believe to be trivial);

• the adequacy of the disclosures in the financial statements; and

• any other matters that the Auditors must communicate to the Committee under applicable
accounting or auditing standards.

6. Audited Financial Statement Review; Quarterly and Annual Reports. The Committee will
review the annual audited financial statements, the quarterly financial statements and the Company’s
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk
Factors,” as appropriate, with management and the Auditors. The Committee will be responsible for
recommending to the Board whether the proposed annual audited financial statements should be included

3
in the Company’s Annual Report on Form 10-K.

7. Earnings Announcements. The Committee will review and discuss with management and the
Auditors any proposed earnings press releases and other financial information and guidance regarding the
Company’s results of operations provided publicly or to ratings agencies.

8. Proxy Report. After the Public Effective Date, the Committee will oversee the preparation of any
report of the Committee required by applicable law or stock exchange listing requirements to be included
in the Company’s annual proxy statement.

9. Accounting Principles and Policies. The Committee will review and discuss with management
and the Auditors significant issues regarding accounting principles and financial-statement presentation,
including:

• critical accounting policies and practices;

• alternative accounting policies available under GAAP;

• the potential impact on the Company’s financial statements of alternative treatments and any
off-balance sheet structures; and

• any other significant reporting issues and judgments, significant regulatory, legal, and
accounting initiatives, or developments that may have a material impact on the Company’s
financial statements, compliance programs, and policies.

The Committee will review with the Auditors and management, if appropriate, any written
communication, such as any management letter or internal-control letter, and monitor management’s
response to such communications. At least annually, the Committee will discuss with the Auditors the
matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees,
as adopted by the PCAOB (including any successor rule adopted by the PCAOB).

10. Management Cooperation with Audit. The Committee will evaluate management’s cooperation
with the Auditors during their audit examination, including any significant difficulties or disagreements
encountered during the audit, if any.

Internal Control and Procedures:

11. Risk Assessment and Management. The Committee will review and discuss with management
and the Auditors the Company’s processes and policies on risk identification, management and assessment
in all areas of the Company’s business, but the Board shall continue to have overall responsibility for
evaluating key business risks faced by the Company, including but not limited to data privacy, technology,
information security (including data-security and back-up of information systems), competition and
regulation. Areas of focus for the Committee shall include the Company’s policies and other matters
relating to the Company’s investments, cash management and foreign exchange management, major
financial risk exposures, the adequacy and effectiveness of the Company’s information security policies
and practices and the internal controls regarding information security, and the steps taken by management
to monitor and mitigate or otherwise control these exposures and to identify future risks.

12. Internal Auditors. The Committee will review the activities of the Company’s internal audit team
and discuss with that team the adequacy and effectiveness of the Company’s scope, staffing, and general
audit approach. The Committee will review any significant reports prepared by the Company’s internal

4
auditors, as well as management’s response. The head of the internal audit function will also report to and
be evaluated by the Committee.

13. Internal Control over Financial Reporting; Disclosure Controls. The Committee will confer
with management and the Auditors concerning the scope, design, adequacy and effectiveness of internal
control over financial reporting, including the adequacy and effectiveness of the Company’s information
and cyber security policies, the internal controls regarding information security and any significant
deficiencies and significant changes in internal controls, and the Company’s disclosure controls and
procedures. The Committee will review reports on significant findings and recommendations with respect
to internal controls over financial reporting, together with management responses and any special audit
steps adopted in light of any material control deficiencies.

14. Correspondence with Regulators. The Committee will consider and review with management,
the Auditors, and outside advisors or accountants any correspondence with regulators or governmental
agencies and any published reports that raise material issues regarding the Company’s financial statements
or accounting policies.

15. Internal Control Report. At least annually (if required by applicable stock exchange listing
requirements) or as may otherwise be determined by the Committee, the Committee will review a report by
the Auditors describing its internal quality-control procedures and any material issues raised by (a) that
firm’s internal quality-control review, (b) any peer review of the firm’s internal quality-control procedures
or review, or (c) any inquiry or investigation by governmental or professional authorities conducted in the
last five years of any audit performed by the Auditors.

16. Complaint Procedures. The Committee will oversee procedures for receiving, retaining, and
investigating the following:

• complaints received by the Company regarding accounting, internal accounting controls, or


auditing matters; and

• confidential and anonymous submissions by employees concerning questionable accounting or


auditing matters.

In addition, the Committee will oversee procedures for receiving, retaining, and investigating any “hotline”
complaints or submissions delegated to the Committee by the Board.
17. Ethical Compliance. The Committee will review the results of management’s efforts to monitor
compliance with the Company’s programs and policies designed to ensure compliance with applicable laws
and stock exchange listing requirements, including the Company’s Code of Business Conduct and Ethics.

18. Related Party Transactions. The Committee will review and approve, in accordance with the
Company’s policies, any related party transaction as defined by applicable law or stock exchange listing
requirements.

Other Matters:

19. Committee Self-Assessment. The Committee will annually evaluate its performance and the
adequacy of this Charter.

20. Other Legal and Finance Matters. The Committee will review with management legal and
regulatory compliance, as well as any actual, pending or threatened legal or financial matters that could

5
significantly affect the Company’s business or financial statements or as otherwise deemed appropriate by
the Committee.

MEETINGS AND MINUTES

The Committee will meet whenever its members deem a meeting necessary or appropriate. The
Committee will determine where and when to meet.

Unless otherwise determined by the Committee, each regularly scheduled meeting will conclude
with an executive session that excludes members of management. As part of its responsibility to foster open
communication, the Committee will meet periodically with management, personnel in charge of the internal
audit function and the Auditors in separate executive sessions. From time to time, or when requested by the
Board, the Chairperson of the Committee will report to the Board.

The Committee will maintain written minutes of its meeting and regularly report to the Board on
its actions and recommendations. The Committee may act by unanimous written consent; when it does so,
those actions will be filed in the minute book.

You might also like