Audit Committee

Purpose

The Audit Committee is appointed by the Board of Directors of TripAdvisor, Inc. (the "Company") to oversee the accounting and financial reporting processes of the Company and the audits of the Company's financial statements. In that regard, the Audit Committee assists the Board in monitoring (1) the integrity of the financial statements of the Company, (2) the inde-pendent registered public accounting firm's qualifications and independence, (3) the performance of the Company's internal audit function and independent registered public accounting firm, and (4) the compliance by the Company with legal and regulatory requirements.

The Audit Committee shall prepare the report required by the rules of the Securities and Exchange Commission (the "Commission") to be included in the Company's annual proxy statement.

Committee Membership

The Audit Committee shall consist of no fewer than three members. Each member of the Audit Committee shall meet the independence and experience requirements of The NASDAQ Stock Market, Inc. Marketplace Rules and under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All members of the Audit Committee shall be able to read and understand fundamental financial statements. No member of the Audit Committee shall have participated in the preparation of the financial statements of the Company in the past three years. These membership requirements shall be subject to exemptions and cure periods permitted by NASDAQ and Commission rules, as in effect from time to time.

At least one member of the Audit Committee shall be an "audit committee financial expert" as defined by the Commission. The members of the Audit Committee shall be appointed and may be replaced by the Board.

Meetings

The Audit Committee shall meet as often as it determines necessary but not less frequently than quarterly. The Audit Committee shall meet periodically with management, the internal auditors and the independent registered public accounting firm in separate executive sessions, and to have such other direct and independent interaction with such persons from time to time as the members of the Audit Committee deem necessary or appropriate. The Audit Committee may re-quest any officer or employee of the Company or the Company's outside counsel or independent registered public accounting firm to attend a meeting of the Audit Committee or to meet with any members of, or consultants to, the Audit Committee. Written minutes of Audit Committee meetings shall be maintained.

Committee Authority and Responsibilities

The Audit Committee shall have the sole authority to appoint, determine funding for, and oversee the independent registered public accounting firm (subject, if applicable, to stockholder ratification). The Audit Committee shall be directly responsible for the compensation and over-sight of the work of the independent registered public accounting firm (including resolution of disagreements between management and the independent registered public accounting firm re-garding financial reporting) for the purpose of preparing or issuing an audit report or related work. The independent registered public accounting firm shall report directly to the Audit Com-mittee.

The Audit Committee shall pre-approve all auditing services, internal control-related services and permitted non-audit services to be performed for the Company by its independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act that are approved by the Audit Committee prior to the completion of the audit. The Audit Committee shall review and discuss with the independent registered public accounting firm any documentation supplied by the independent registered public accounting firm as to the nature and scope of any tax services to be approved, as well as the potential effects of the provision of such services on the independent registered public accounting firm's independence. The Audit Committee may form and delegate authority to sub-committees 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 engage and determine funding for independent legal, accounting or other advisors. The Company shall provide appropriate funding, as determined by the Audit Committee, for payment of compensation to the independent registered public accounting firm for the purpose of rendering or issuing an audit report or performing other audit, review or attest services for the Company and to any advisors employed by the Audit Committee, as well as funding for the payment of ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

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.

In carrying out its responsibilities, the Audit Committee shall maintain flexibility in its policies and procedures, in order to best address changing conditions and circumstances.

The Audit Committee, to the extent it deems necessary or appropriate, shall:

Financial Statement and Disclosure Matters

  1. Review and discuss with management and the independent registered public accounting firm the annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the Board whether the audited financial statements should be included in the Company's Form 10-K.
  2. Review and discuss with management and the independent registered public accounting firm the Company's quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent registered public accounting firm's review of the quarterly financial statements.
  3. Discuss with management and the independent registered public accounting firm signifi-cant financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including any significant changes in the Company's selection or application of accounting principles, any major issues as to the adequacy of the Company's internal controls, any special steps adopted in light of material control de-ficiencies and the adequacy of disclosures about changes in internal control over financial reporting.
  4. Review and discuss with management (including the senior internal audit executive) and the independent registered public accounting firm the Company's internal controls report and the independent registered public accounting firm's attestation report prior to the fil-ing of the Company's Form 10-K.
  5. Review and discuss quarterly reports from the independent registered public accounting firms on:
    1. All critical accounting policies and practices to be used.
    2. All alternative treatments of financial information within U.S. generally accepted ac-counting principles (GAAP) that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm.
    3. Other material written communications between the independent registered public ac-counting firm and management, such as any management letter or schedule of unadjusted differences.
  6. Discuss with management the Company's earnings press releases, including the use of "pro forma" or "adjusted" non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made).
  7. Discuss with management and the independent registered public accounting firm the ef-fect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.
  8. Discuss with management the Company's major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management policies.
  9. Discuss with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 114 relating to the conduct of the au-dit, 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.
  10. Review disclosures made to the Audit Committee by the Company's CEO and CFO dur-ing their certification process for the Form 10-K and Form 10-Q about any significant de-ficiencies 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. Ensure that a public announcement of the Company's receipt of an audit opinion that contains a going concern qualification is made promptly.
  12. Oversight of the Company's Relationship with the Independent Registered Public Accounting Firm

  13. Review and evaluate the lead partner of the independent registered public accounting firm team.
  14. Obtain and review a report from the independent registered public accounting firm at least annually regarding (a) the independent registered public accounting firm's 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 and (c) any steps taken to deal with any such issues. Evaluate the qualifications, performance and independence of the inde-pendent registered public accounting firm, including considering whether the independ-ent registered public accounting firm's quality controls are adequate and the provision of permitted non-audit services is compatible with maintaining the independent registered public accounting firm's independence, and taking into account the opinions of manage-ment and internal auditors. The Audit Committee shall present its conclusions with re-spect to the independent registered public accounting firm to the Board.
  15. Obtain from the independent registered public accounting firm (i) a formal written state-ment delineating all relationships between the independent registered public accounting firm and the Company and (ii) a written affirmation that the auditor is independent. It is the responsibility of the Audit Committee to actively engage in a dialogue with the inde-pendent registered public accounting firm with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm and for purposes of taking, or recommending that the full Board take, appropriate action to oversee the independence of the outside auditor.
  16. Ensure the rotation of the lead (and coordinating) audit partner having primary responsi-bility for the audit and the audit partner responsible for reviewing the audit as required by law.
  17. Recommend to the Board policies for the Company's hiring of employees or former em-ployees of the independent registered public accounting firm.
  18. Meet with the independent registered public accounting firm prior to the audit to discuss the planning and staffing of the audit.
  19. Oversight of the Company's Internal Audit Function

  20. Review the appointment and replacement of the senior internal auditing executive.
  21. Review the significant reports to management prepared by the internal auditing depart-ment and management's responses.
  22. Discuss with the independent registered public accounting firm and management the in-ternal audit department's planned scope in connection with the annual risk assessment
  23. Review with management and the senior internal auditing executive the charter, plans, annual budget, staffing and organizational structure of the internal auditing function. Confirm there are no unjustified restrictions or limitations, which impact or impair the scope of the internal audit department's activities or their access to required information.
  24. Compliance Oversight Responsibilities

  25. Obtain from the independent registered public accounting firm assurance that Sec-tion 10A(b) of the Exchange Act has not been implicated.
  26. Discuss with management, the Company's senior internal auditing executive, and the in-dependent registered public accounting firm the Company's and its subsidiaries' compli-ance with applicable legal requirements and codes of conduct and confirm with the inde-pendent registered public accounting firm that in the course of performing their duties they did not become aware of any violations by the Company or its subsidiaries of appli-cable law or codes of conduct. Advise the Board with respect to the Company's policies and procedures regarding compliance with applicable laws and regulations and with the Company's code of conduct.
  27. To the extent required by NASDAQ rules, approve all related person transactions.
  28. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
  29. Discuss with management and the independent registered public accounting firm any correspondence with regulators or governmental agencies and any published reports which raise material issues regarding the Company's financial statements or accounting policies.
  30. Discuss with the Company's General Counsel legal matters that may have a material im-pact on the financial statements or the Company's compliance policies.
Limitation of Audit Committee's 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 Compa-ny's 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 re-sponsibilities of management and the independent registered public accounting firm. Additional-ly, the Audit Committee as well as the Board recognizes that members of the Company's man-agement who are responsible for financial management, as well as the independent registered public accounting firms, have more time, knowledge, and detailed information on the Company than do Audit Committee members; consequently, in carrying out its oversight responsibilities, the Audit Committee is not providing any expert or special assurances with respect to the Com-pany's financial statements or any professional certifications as to the independent registered public accounting firm's work.

Jeremy Philips Robert S. Wiesenthal Spencer M. Rascoff
  • Member
  • Chair
  • Financial Expert
  • Independent Director