Audit committee

The audit committee comprises at least three independent BoD members, with all members having been determined by the BoD as being fully independent and financially literate. William G. Parrett, the committee’s chair, as well as the other two members, have accounting and financial management expertise and are “financial experts” according to the rules established by the US Sarbanes-Oxley Act of 2002.

The committee operates under the audit committee charter, as described in the “Organization Regulations of UBS AG” (organization regulations) and its annexes. The function of the audit committee is to serve as an independent and objective body with oversight of: i) the UBS Group’s accounting policies, financial reporting and disclosure controls and procedures, ii) the quality, adequacy and scope of external audit, iii) UBS’s compliance with financial reporting requirements, iv) the Executives’ approach to internal controls with respect to the production and integrity of the financial statements and disclosure of the financial performance, v) the performance of Group Internal Audit in conjunction with the Chairman and the risk committee.

The Executives are responsible for the preparation, presentation and integrity of the financial statements. External auditors are responsible for auditing UBS’s and the UBS Group’s annual financial statements and reviewing the quarterly financial statements.

The committee reports back to the BoD about its discussions with UBS’s external auditors. Once per year, the lead partners take part in a BoD meeting, presenting the longform report of UBS’s external auditors, as required by the Swiss Financial Market Supervisory Authority (until 31 December 2008, Swiss Federal Banking Commission).