Audit Committee

Audit Committee of the Board of Directors Charter



(As adopted by the Board of Directors on February 14, 2012)

The Board of Directors (the “Board”) of Post Properties, Inc., a Georgia corporation (the “Corporation”), has previously constituted and established an Audit Committee (the “Audit Committee”) with the authority, responsibility and specific duties as described herein. This Charter and the composition of the Audit Committee are intended to comply with applicable law, including the federal securities laws and the rules of The New York Stock Exchange (the “NYSE”). This document replaces and supersedes in its entirety the previous Charter of the Audit Committee adopted by the Board on February 25, 2010.

I. Purpose

A. The primary function of Audit Committee is to assist the Board of Directors of the Corporation (the “Board”) in its oversight of:

  • the integrity of the Corporation’s financial statements and financial reporting;
  • the integrity and effectiveness of the Corporation’s disclosure and internal controls;
  • the Corporation’s compliance with legal and regulatory requirements;
  • the independence, qualifications and performance of the Corporation’s independent accountants; and
  • the independence, qualifications and performance of the Corporation’s internal audit function, as appropriate.

B. Consistent with this function, the Audit Committee shall encourage continuous improvement of, and adherence to, the Corporation’s policies, procedures and practices at all levels.

C. The Audit Committee shall primarily fulfill these responsibilities by carrying out the activities enumerated in Section IV of this Charter.

II. Membership

A. The Audit Committee shall be comprised of three (3) or more directors appointed by the Board, and the Audit Committee’s composition will meet the requirements of the listing standards of the NYSE (the “Listing Standards”), the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules and regulations of the Securities and Exchange Commission (the “Commission”). Accordingly, all members of the Audit Committee will be “independent directors” within the meaning of the Listing Standards, the Exchange Act and the rules and regulations of the Commission, and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Audit Committee. The Board shall affirmatively conclude that the members of the Audit Committee are independent, as required.

B. In addition, each member of the Audit Committee will be financially literate and understand fundamental financial statements, including the Corporation’s balance sheet, income statement, and cash flow statement, at the time of appointment to the Audit Committee. At least one member of the Audit Committee shall have accounting or related financial management expertise, and, unless the Board determines otherwise, at least one member must be an “audit committee financial expert” as such term is defined by the rules and regulations of the Commission. No member of the Audit Committee may simultaneously serve on more than three (3) audit committees of public companies.

C. The members of the Audit Committee shall be elected by the Board at the annual organizational meeting of the Board and shall serve until their successors shall be duly elected and qualified. Any vacancies on the Audit Committee occurring prior to the annual organizational meeting shall be filled by the Board. Unless a Chairperson is elected by the full Board, the members of the Audit Committee may designate a Chairperson by majority vote of the full Audit Committee membership.

D. A majority of the Audit Committee shall constitute a quorum to take any action by the Audit Committee.

III. Meetings

A. The Audit Committee shall meet at least four (4) times annually, and more frequently as circumstances may dictate. The Audit Committee shall meet at least annually with management of the Corporation (in particular the Corporation’s senior financial officers), the Corporation’s Vice President or director of internal auditing and the Corporation’s independent accountants in separate executive sessions to discuss any matters that the Audit Committee or each of these groups believe should be discussed privately, such as internal controls and the fullness and accuracy of the Corporation’s financial statements. In addition, the Audit Committee should meet with the independent accountants and management quarterly to review the Corporation’s financial statements.

IV. Responsibilities

The Audit Committee is responsible for oversight of the independent accountants, the Corporation’s internal accounting controls and auditing functions, and the financial reporting process. The Audit Committee recognizes that management is responsible for preparing the Corporation’s financial statements and that the independent accountants are responsible for auditing those financial statements. Additionally, the Audit Committee recognizes that management, as well as the independent accountants, have more time, knowledge and more detailed information on the Corporation than do Audit Committee members. Consequently, in carrying out its oversight responsibilities, the Audit Committee is not providing any expert or special assurance as to the Corporation’s financial statements or any professional certification as to the independent accountant’s work.

To fulfill its responsibilities and duties, the following functions shall be the common recurring activities of the Audit Committee in its oversight function. These functions are set forth as a guide with the understanding that the Audit Committee may diverge from this guide as appropriate given the circumstances and in compliance with the Listing Standards, the Exchange Act and the rules and regulations of the Commission. The Audit Committee shall:

A. Document/Report/Review

1. As part of an on-going self assessment process, review and update this Charter periodically, and at least annually, or as conditions may dictate.

2. Request that the Corporation maintain a copy of this Charter on the Corporation’s website.

3. Review the Corporation’s annual financial statements and any reports or other financial information submitted publicly, including any certification, report, opinion or review rendered by the independent accountants of the Corporation.

4. Prepare the annual Audit Committee Report for the Corporation’s proxy statement in accordance with applicable Securities and Exchange Commission regulations.

B. Independent Accountants

1. Directly appoint, retain, compensate, evaluate and terminate the Corporation’s independent accountants. In addition, the Audit Committee shall have the sole authority to approve all audit engagement fees and terms. The independent accountants shall report directly to the Audit Committee. Further, the Audit Committee shall be directly responsible for oversight of the independent accountants, including resolution of disagreements between management and the independent accountants.

2. Discuss with the independent accountants at least annually the accountants’ internal quality-control procedures, any material issues raised by the most recent peer review and any other matters required to be addressed pursuant to the Listing Standards.

3. Discuss with the independent accountants the matters required to be discussed by Statement of Auditing Standards No. 61, as amended (Codification of Statement on Auditing Standards, AU § 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T relating to the conduct of the audit.

4. Receive from the independent accountants, on a periodic basis, a formal written statement delineating all relationships between the independent accountants and the Corporation consistent with Independence Standards Board Standard 1 (ISB No. 1), as adopted by the Public Company Accounting Oversight Board in Rule 3600T.

5. Obtain from the independent accountants assurance that Section 10A(b) of the Exchange Act (generally relating to the auditors’ identification of illegal acts and related party transactions) has not been implicated.

6. Evaluate the independent accountants, including the independent accountants’ qualifications, performance and independence, the competence, experience and qualifications of the lead partner and senior members of the independent accountants’ team, and the quality control procedures of the independent accountants. The Audit Committee also shall ensure the rotation of the audit partners as required by law. The Audit Committee will present its conclusions with respect to the independent accountants to the Board.

7. Discuss with the independent accountants the overall scope and plans for their audits, including the adequacy of staffing.

8. Pre-approve all audit services and all permissible non-audit services to be performed for the Corporation by its independent accountants, as contemplated by Section 10A(i) of the Exchange Act. The Audit Committee may delegate to one or more of its members the authority to pre-approve audit services and permissible non-audit services; provided, however, that all pre-approved services must be disclosed by such delegate to the full Audit Committee at its next scheduled meeting.

9. Recommend, if so determined by the Audit Committee, that the Board take certain actions to satisfy itself of the independent accountants’ independence.

10. Receive an annual report from the independent accountants that describes (a) all critical accounting policies and practices to be used by the Corporation, (b) all material alternative treatments within GAAP suggested to management, and (c) any other written communication with management.

C. Internal Audit

1. Periodically meet with the Vice President or director of internal auditing.

2. Review and concur in the appointment, evaluation, replacement, reassignment, or termination of the Vice President or director of internal auditing.

3. Consider and approve the plan of the internal auditors.

4. Review with the Vice President or director of internal auditing and the independent accountants the coordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of audit resources.

5. Consider and review with management and the Vice President or director of internal auditing (a) any difficulties encountered in the course of their audits, (b) any changes required in the planned scope of their audit plan, (c) the internal auditing department budget and staffing, (d) the internal auditing department charter, and (e) the internal auditing department’s compliance with the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing.

D. Financial Reporting Process

1. Review with management and the independent accountants the Corporation’s interim financial statements and disclosures and the information set forth in Management’s Discussion and Analysis in the Corporation’s Quarterly Reports on Form 10-Q prior to filing or prior to the release of earnings, including a discussion with the independent accountants of the matters to be discussed by Statement of Auditing Standards No. 100.

2. Review with management and the independent accountants the Corporation’s annual audited financial statements and disclosures and the information set forth in Management’s Discussion and Analysis to be included in the Corporation’s Annual Report on Form 10-K (or the Annual Report to Shareholders if distributed prior to the filing of the Form 10-K) including (a) their judgment about the quality of the Corporation’s accounting principles as applied in its financial reporting, (b) the reasonableness of significant judgments, and (c) the clarity of the disclosures in the financial statements. Recommend, based on its review and discussion, that the audited financial statements be included in the Corporation’s Form 10-K for filing with the Commission.

3. Obtain a report made to the Audit Committee by the Chief Executive Officer and Chief Financial Officer of the Corporation during their certification processes for the Form 10-K and each Form 10-Q which describes, if any, (a) all significant deficiencies in the design or operation of the Corporation’s internal controls which could adversely affect the Corporation’s ability to record, process and report financial data, and (b) any fraud (whether or not material) involving management or other employees who have a significant role in the Corporation’s internal controls.

4. Discuss generally, in terms of types of information to be disclosed and the type of presentation to be made, the Corporation’s earnings press releases as well as financial information and earnings guidance provided to analysts and rating agencies. The Chairman of the Audit Committee should review each earnings press release prior to release.

5. In consultation with the independent accountants, review the integrity of the Corporation’s financial reporting processes, both internal and external. In support of this review, periodically discuss with management the financial reporting controls over key business processes of the Corporation and any special audit steps adopted in light of material control deficiencies.

6. Discuss with the independent accountants any significant matters regarding internal controls over financial reporting that have come to their attention during the conduct of the audit.

7. Review analyses prepared by management and/or the independent accountants setting forth significant financial reporting issues and judgments made in connection with the preparation of financial statements, including analyses of the effects of alternative GAAP methods on the financial statements.

8. Review the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Corporation.

9. Consider management and the independent accountants’ judgment about the quality and appropriateness of the Corporation’s accounting principles and policies and changes to such principles and policies as applied in its financial reporting.

10. Assess the process for establishing key estimates and reserves within the financial statements and consider the independent accountants’ judgments about the appropriateness of such processes.

11. Consider the independent accountants’ judgment about the appropriateness of the accounting principles and disclosure practices adopted by management in connection with new transactions or events.

E. Process Improvement

1. Establish regular reporting to the Audit Committee of significant judgments made in management’s preparation of the Corporation’s financial statements.

2. Following completion of the annual audit, review separately with each of management and the independent accountants any problems, difficulties or disagreements encountered during the course of the audit, including any restrictions on the scope of work or access to required information. As part of this review the Audit Committee should, among other items, review: (a) any accounting adjustments that were noted by the independent accountants but were “passed,” (b) any communications between the audit team and the independent accountants’ national office respecting auditing or accounting issues raised by the engagement and (c) any management letter issued by the independent accountants to the Corporation.

3. Review any significant disagreement among management and the independent accountants in connection with preparation of the Corporation’s financial statements.

F. Ethical and Legal Compliance and Risk Management

1. Review the status of tax returns generally.

2. Evaluate, monitor and approve on at least a quarterly basis the Corporation’s real estate investment trust compliance computations.

3. Review policies with respect to risk and fraud assessment and risk and fraud management. Meet periodically with management to review the results of risk and fraud assessments conducted by management, including the Corporation’s major financial risk and fraud exposures and the steps management has taken to monitor and control such exposures.

4. Approve the Corporation’s hiring of employees or former employees of the independent accountants.

5. Review, with the Corporation’s secretary, any legal matters that could have a significant impact on the Corporation’s financial statements.

6. Establish procedures for the receipt, retention and treatment of complaints regarding the Corporation’s accounting, internal accounting controls or auditing matters and confidential, anonymous submission of concerns regarding accounting questions or auditing matters and regularly review such complaints.

7. Oversee the administration of the Corporation’s Code of Business Conduct (which includes the review of the terms, conditions and arrangements involving any related party or potential conflict of interest transactions) and the Corporation’s Code of Ethics for Senior Executive and Financial Officers. Review the Corporation’s Code of Business Conduct and Code of Ethics on an annual basis and annually receive an acknowledgment of compliance with the Code of Ethics for Senior Executive and Financial Officers by the Senior Executive and Financial Officers.

8. Review, with the Corporation’s secretary, legal compliance matters, including corporate securities trading practices.

9. Perform any other activities consistent with the Charter, the Corporation’s Bylaws and governing law, as the Audit Committee or the Board deems necessary or appropriate.

10. Serve as the Qualified Legal Compliance Committee (the “QLCC”) with the authority and responsibility as determined from time to time by the Board of Directors. The Audit Committee, as the QLCC, shall establish written procedures by which it will handle reports of material violations.

V. Administration

A. The Audit Committee shall have prompt and unrestricted access to all financial and operating information relevant to the Corporation’s business. The Audit Committee shall have ready access to the Corporation’s legal counsel and to the independent accountants, and shall be provided from time to time with staff assistance from within the Corporation as requested.

B. The Audit Committee is empowered to employ its own legal counsel, accountants or other advisors, at the Corporation’s expense, to deal with specific problems or issues that arise in the course of carrying out its duties and responsibilities.

C. Report periodically to the Board, which report may include issues that arise with respect to (a) the quality and integrity of the Corporation’s financial statements, (b) the Corporation’s compliance with legal or regulatory requirements, (c) the performance and independence of the Corporation’s independent auditors or (d) the performance of the internal audit function.

D. Maintain minutes or other records of meetings and activities of the Committee.

E. Annually evaluate the performance of the Committee.

VI. Certification

This Charter of the Audit Committee was duly approved and adopted by the Board of the Corporation on the 14th day of February, 2012.

Name: Sherry W. Cohen
Title: Executive Vice President and
Corporate Secretary