Audit Committee Charter

AUDIT COMMITTEE CHARTER OF MONARCH CASINO & RESORT, INC.
(Effective June 14, 2000. Revised April 9, 2004)

Purpose

There shall be an Audit Committee (“Committee”) of the Board of Directors of Monarch Casino & Resort, Inc., a Nevada corporation (the “Company”) which is designated by and reports to the Board of Directors (the “Board”.) The Committee shall have responsibility to oversee the Company's management, internal audit and independent public accountants in regard to corporate accounting, financial reporting and system of internal control established by management. The Committee has the authority to conduct any investigations it deems appropriate, with full access to all books and records, facilities, personnel and outside advisors of the Company.

Organization

The Committee shall consist of at least three Directors. Each Director appointed to the Committee shall:

1. Not be disqualified from being an “independent director” within the meaning of Rule 4200(a)(15) of the NASD Manual, or Rule 10A-3 of the Securities Exchange Act of 1934 and shall have no relationship with the Company which, in the opinion of the Board, would interfere with the exercise of independent judgment; and
2. Be able to read and understand fundamental financial statements, including the Company's balance sheet, income statement and cash flow statement.

At least one member of the Committee shall have past employment experience in finance or accounting, requisite professional certification in accounting or any other comparable experience or background which results in the director's financial sophistication. The Board will determine if any member of the Committee is a “financial expert” as defined by the Securities and Exchange Commission.

Authority

The Committee has the authority necessary to carry out the Responsibilities of the Committee as set forth herein and as required by law. The Committee has authority to engage independent counsel and/or other professional advisers as the Committee deems necessary for the competent performance of its responsibilities, and receive appropriate funding from the Company, as the Committee deems necessary, to carry out the responsibilities of the Committee. 

Responsibilities

The Committee recognizes that the preparation of the Company's financial statements and other financial information is the responsibility of the Company's management and that the auditing, or conducting of limited reviews, of those financial statements and other financial information is the responsibility of the Company's independent public accountants. The Committee's responsibility is to oversee the financial reporting process.

The Company's management, and its independent public accountants, in the exercise of their responsibilities, acquire greater knowledge and more detailed information about the Company and its financial affairs than the members of the Committee. Consequently, the Committee is not responsible for providing any expert or other special assurance as to the Company's financial statements and other financial information or any professional certification as to the outside auditors' work, including, without limitation, their reports on and limited reviews of, the Company's financial statements and other financial information.

The Committee is responsible for the appointment, compensation, retention and oversight of the work performed by any registered public accounting firm engaged to prepare or issue an audit report or to perform other audit, review or attest services for the Company. The independent public accountants shall report directly to the Committee. The Committee shall have a clear understanding with the independent public accountants that the firm ultimately is accountable to the Committee, as the stockholders' representative. 

Oversight

In carrying out its responsibilities, the Committee shall:

1. Charter
   Review and reassess the adequacy of the Audit Committee Charter annually;
2. Independent Public Accountants
   1. Approve the Company's engagement of independent public accountants in advance; or establish pre-approval policies for engagement of independent auditors detailed as to the particular service to be performed and which do not delegate to management the responsibilities required by law to be undertaken by the Committee with regard to the engagement of independent public accountants;
   2. Require that the independent public accountants provide the Committee with a formal written statement delineating all relationships between the independent public accountants and the Company, consistent with Independence Standards Board Standard No. 1, and discuss with the independent public accountants their independence;
   3. Actively engage in a dialogue with the independent public accountants regarding any disclosed relationships or services that may impact their objectivity and independence;
   4. Take appropriate action to oversee the independence of the independent public accountants;
   5. Review and consider the matters identified in the American Institute of Certified Public Accountants' Statement on Auditing Standards No. 61, and related Statements on Auditing Standards, with the independent public accountants and management;
   6. Beginning with the audited financial statements of the Company for the fiscal year ending December 31, 2000, review and discuss the Company's audited financial statements that are to be included in the Company's Annual Report on Form 10-K with the independent public accountants and management and determine whether to recommend to the Board of Directors that the financial statements be included in the Company's Annual Report on Form 10-K for filing with the Securities and Exchange Commission; and
   7. Review, or the Committee's Chairperson shall review, any matters identified by the independent public accountants pursuant to American Institute of Certified Public Accountants' Statement on Auditing Standards No. 71, and related Statements on Auditing Standards regarding the Company's interim financial statements filed by the Company in the Quarterly Report on Form 10-Q

Related Party Transactions

The Committee shall review and approve all related party transactions (those transactions required to be disclosed pursuant to Item 404 of Regulation S-K) before the Company enters into such transaction.


Complaints Regarding Accounting and Internal Controls

Administer and carry out all duties assigned to the Committee as set forth in the Policy for Resolution of Complaints Concerning Accounting Internal Auditing Controls and/or Auditing Matters (“Attachment 1”) which is incorporated into this Audit Committee Charter by reference. 

Firm and Partner Rotation

The Committee shall consider, at least annually, whether the Company should have a policy requiring a regular rotation of the independent public accountants and report its findings to the Board. The Committee shall also establish a policy regarding the rotation of the lead partner and concurring and reviewing partners in accordance with applicable SEC regulations. Further, the Committee may establish a policy regarding the rotation of the partners of the independent public accountants who are responsible for each of the Company’s major business units.