CSI: Governance-Audit Committee

The following Audit Committee Charter is to be adopted by the Audit Committee of the Board of Directors and the Board of Directors of Conversion Services International, Inc. (the "Company"):

Members. The Board of Directors appoints an Audit Committee of at least two (2) members, consisting entirely of "independent" directors of the Board, and designates one member as chair. "Independent" means a director who meets the definition of "independence" under the rules and regulations of the Securities and Exchange Commission, and The American Stock Exchange or the Over The Counter Bulletin Board (as applicable) as determined by the Board of Directors.

The chair of the Audit Committee must be financially sophisticated and shall have past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background, as determined by the Board of Directors. Each other member of the Audit Committee must be financially literate and be able to read and understand fundamental financial statements, including a balance sheet, income statement and cash flow statement, as determined by the Board of Directors. Members of the Audit Committee may not receive fees from the Company except as permitted by rules of the Securities and Exchange Commission, and The American Stock Exchange or the Over The Counter Bulletin Board (as applicable). Each appointed member of the Audit Committee shall be subject to annual reconfirmation and may be removed by the Board of Directors at any time.

Audit Committee Financial Expert. At least one of the independent members of the Audit Committee shall be an "Audit Committee Financial Expert" under the rules and regulations of the Securities and Exchange Commission and The American Stock Exchange, as determined by the Board of Directors.
Purposes, Duties, and Responsibilities. The Audit Committee represents the Board of Directors in discharging its responsibility relating to the accounting, reporting and financial practices of the Company and its subsidiaries. In such capacity, the Audit Committee has (i) direct responsibility for the appointment, compensation, retention (and termination) and oversight of the work of the independent auditor for the purpose of preparing audit reports or performing other audit, review or attest services for the Company, and (ii) oversight responsibility for internal controls, accounting and audit activities and the Code of Conduct and Ethics of the Company and its subsidiaries. However, the Audit Committee shall not relieve the Company's management of its responsibilities for preparing financial statements which accurately and fairly present the Company's financial results and conditions or the responsibilities of the independent accountants relating to the audit or review of financial statements. Specifically, the Audit Committee will:
1. Have the authority and responsibility with respect to the appointment, compensation, retention (and termination) and oversight of the work of the independent public accountants as auditors of the Company for the purpose of preparing audit reports or performing other audit, review or attest service and to perform the annual audit in accordance with the Sarbanes-Oxley Act.
2. Be the body to which the independent auditor of the Company directly reports.
3. Ensure the receipt from the independent accountants of the Company a written statement delineating all relationships between such independent accountants and the Company (consistent with Independence Standards Board Standard 1); discuss and review with the independent accountants any disclosed relationships or services which may impact the objectivity and independence of the independent accountant; and make recommendations to the Board as to appropriate action to be taken to oversee the independence of the independent accountant.
4. Review with the independent accountants the scope of the audit and the results of the annual audit examination by the independent accountants and any reports of the independent accountants with respect to reviews of interim financial statements.
5. Review information, including written statements from the independent accountants, concerning any relationships between the auditors and the Company or any other relationships that may adversely affect the independence of the auditors and assess the independence of the outside auditor.
6. Review and discuss with management and the independent auditors the Company's annual audited financial statements, including a discussion with the auditors of their judgments as to the quality of the Company's accounting principles.
7. Review the services to be provided by the independent auditors to assure that the independent auditors do not undertake any engagement for services for the Company that would constitute prohibited services or could be viewed as compromising the auditor's independence.
8. Review with management and the independent auditors the results of any significant matters identified as a result of the independent auditors' interim review procedures prior to the filing of each Form l0-QSB or as soon thereafter as possible. The Audit Committee Chair may perform this function on behalf of the Audit Committee.
9. Review the annual program for the Company's internal audits, if any, and review audit reports submitted by the internal auditing staff, if any.
10. Periodically review the adequacy of the Company's internal controls.
11. Review changes in the accounting policies of the Company and accounting and financial reporting proposals that are provided by the independent accountants that may have a significant impact on the Company's financial reports, and make comments on the foregoing to the Board of Directors.
12. Oversee and review annually the Company's Code of Conduct and Ethics, as well as Company's procedures related thereto.
13. Review the adequacy of the Audit Committee Charter on an annual basis.
14. Make reports and recommendations to the Board of Directors within the scope of its functions.
15. Approve material contracts where the Board of Directors determines that it has a conflict.
16. Establish procedures for receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
17. Have authority to engage independent legal counsel and other advisors which the Audit Committee deems necessary or appropriate to carryout its duties; prepare a budget for the operations of the Audit Committee; and maintain a separate bank account for this purpose.
18. Satisfy itself that management put into place procedures that facilitate compliance with the Disclosure and Financial Reporting Controls provisions of the Sarbanes-Oxley Act.
19. Review all loans to officers and maintain records of meetings and other documents.
20. Review and monitor all related party transactions which may be entered into by the Company as required by rules of the Securities and Exchange Commission, The American Stock Exchange or the Over The Counter Bulletin Board (as applicable).
Meetings. The Audit Committee will meet on a regular basis at least once every quarter, and will hold special meetings as it deems necessary or appropriate in its judgment. However, the Audit Committee will meet at any time that the independent accountants believe that communication to the Audit Committee is required. Meetings may be held in person or telephonically, and shall be at such times and places as the Audit Committee determines. As it deems appropriate, but not less than once each year, the Audit Committee will meet in private session with the independent accountants and with the Internal Audit Manager. The majority of the members of the Audit Committee constitute a quorum and shall be empowered to act on behalf of the Audit Committee. Minutes shall be kept of each meeting of the Audit Committee.