Adopted: [_______, 202_]
CHARTER OF THE AUDIT COMMITTEE
THE BOARD OF DIRECTORS
ADIT EDTECH ACQUISITION CORP.
The purposes of the Audit Committee (the Audit Committee) of the Board of Directors (the Board) of Adit EdTech Acquisition Corp. (the Company) are to assist the Board in monitoring: (1) the integrity of the annual, quarterly, and other financial statements of the Company, (2) the independent auditors qualifications and independence, (3) the performance of the Companys independent auditor, and (4) the compliance by the Company with legal and regulatory requirements. The Audit Committee also shall review and approve all related-party transactions.
The Audit Committee shall prepare the report required by the rules of the Securities and Exchange Commission (Commission) to be included in the Companys annual proxy statement.
II. COMMITTEE MEMBERSHIP
The Audit Committee shall consist of no fewer than three members, absent a temporary vacancy. The Audit Committee shall meet the Audit Committee Requirements of the New York Stock Exchange and the independence and experience requirements of Section 10A(m)(3) of the Securities Exchange Act of 1934 (Exchange Act) and the rules and regulations of the Commission.
The members of the Audit Committee shall be appointed by the Board. Audit Committee members may be replaced by the Board. There shall be a chairperson of the Audit Committee which shall also be appointed by the Board. The chairperson of the Audit Committee shall be a member of the Audit Committee and, if present, shall preside at each meeting of the Audit Committee. The chairperson shall advise and counsel with the executives of the Company, and shall perform such other duties as may from time to time be assigned to him or her by the Audit Committee or the Board of Directors.
The Audit Committee shall meet as often as it determines, but not less frequently than quarterly. The Audit Committee shall meet periodically with management and the independent auditor in separate executive sessions. The Audit Committee may request any officer or employee of the Company or the Companys outside counsel or independent auditor to attend a meeting of the Audit Committee or to meet with any members of, or consultants to, the Audit Committee.
IV. COMMITTEE AUTHORITY AND RESPONSIBILITIES
The Audit Committee shall have the sole authority to appoint or replace the independent auditor. The Audit Committee shall be directly responsible for determining 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. The independent auditor shall report directly to the Audit Committee.
The Audit Committee shall pre-approve all auditing services and permitted non-audit services to be performed for the Company by its independent auditor, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the Audit Committee prior to the completion of the audit). The Audit Committee may form and delegate authority to subcommittees of the Audit Committee consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting.
The Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting, or other advisors. The Company shall provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to (i) the independent auditor for the purpose of rendering or issuing an audit report, and (ii) any advisors employed by the Audit Committee.
The Audit Committee shall make regular reports to the Board. The Audit Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval. The Audit Committee annually shall review the Audit Committees own performance.
The Audit Committee shall:
Financial Statement and Disclosure Matters
Meet with the independent auditor prior to the audit to review the scope, planning, and staffing of the audit.
Review and discuss with management and the independent auditor the annual audited financial statements, and recommend to the Board whether the audited financial statements should be included in the Companys Annual Report on Form 10-K (or the annual report to shareholders if distributed prior to the filing of the Form 10-K).
Review and discuss with management and the independent auditor the Companys quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditors review of the quarterly financial statements.
Discuss with management and the independent auditor, as appropriate, significant financial reporting issues and judgments made in connection with the preparation of the Companys financial statements, including:
any significant changes in the Companys selection or application of accounting principles;
the Companys critical accounting policies and practices;
all alternative treatments of financial information within GAAP that have been discussed with management and the ramifications of the use of such alternative accounting principles;
any major issues as to the adequacy of the Companys internal controls and any special steps adopted in light of material control deficiencies; and
any material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences.
Discuss with management the Companys earnings press releases generally, including the use of pro forma or adjusted non-GAAP information, and any financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be general and include the types of information to be disclosed and the types of presentations to be made.
Discuss with management and the independent auditor the effect on the Companys financial statements of (i) regulatory and accounting initiatives and (ii) off-balance sheet structures.
Discuss with management the Companys major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Companys risk assessment and risk management policies.
Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.
Review disclosures made to the Audit Committee by the Companys Chief Executive Officer and Chief Financial Officer (or individuals performing similar functions) during their certification process for the Form 10-K and Form 10-Qs about any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and any fraud involving management or other employees who have a significant role in the Companys internal control over financial reporting.
Oversight of the Companys Relationship with the Independent Auditor
At least annually, obtain and review a report from the independent auditor, consistent with the rules of the Public Company Accounting Oversight Board, regarding (a) the independent auditors internal quality-control procedures, (b) 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, (c) any steps taken to deal with any such issues and (d) all relationships between the independent auditor and the Company. Evaluate the qualifications, performance and independence of the independent auditor, including whether the auditors quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the auditors independence, and taking into account the opinions of management and the internal auditor. The Audit Committee shall present its conclusions with respect to the independent auditor to the Board.
Verify the 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 law. Consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.
Oversee the Companys hiring of employees or former employees of the independent auditor who participated in any capacity in the audit of the Company.
Be available to the independent auditor during the year for consultation purposes.
Compliance Oversight Responsibilities
Obtain assurance from the independent auditor that Section 10A(b) of the Exchange Act has not been implicated.
Review and approve all related-party transactions.
Inquire and discuss with management the Companys compliance with applicable laws and regulations and with the Companys Code of Ethics in effect at such time, if any, and, where applicable, recommend policies and procedures for future compliance.
Establish procedures (which may be incorporated in the Companys Code of Ethics, in effect at such time, if any) for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or reports which raise material issues regarding the Companys financial statements or accounting policies.
Discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Companys financial statements or accounting policies.
Discuss with the counsel legal matters that may have a material impact on the financial statements or the Companys compliance policies.
Review and approve all payments made to the Companys officers and directors or its or their affiliates. Any payments made to members of the Audit Committee will be reviewed and approved by the Board, with the interested director or directors abstaining from such review and approval.
V. LIMITATION OF AUDIT COMMITTEES ROLE
While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Companys financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent auditor.