This excerpt taken from the CVS DEF 14A filed Apr 4, 2007.
The Audit Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of any accounting firm engaged for the purpose of preparing
or issuing an audit report or performing other audit, review or attest services for the Company (subject, if applicable, to shareholder ratification). Each such accounting firm shall report directly to the Audit Committee.
The Audit Committee shall pre-approve the audit services and non-audit services to be provided by the Companys independent auditor pursuant to pre-approval policies and
procedures established by the Audit Committee. The Audit Committee may delegate its authority to pre-approve services to one or more Audit Committee members, provided that such designees present any such approvals to the full Audit Committee at the
next Audit Committee meeting.
The Audit Committee shall review and approve the scope and staffing of the independent auditors annual audit plan(s).
The Audit Committee shall evaluate the independent auditors qualifications, performance and independence, and shall present its conclusions with respect to the independent
auditor to the full Board on at least an annual basis. As part of such evaluation, at least annually, the Audit Committee shall:
obtain and review a report or reports from the Companys independent auditor:
describing the independent auditors internal quality-control procedures;
describing any material issues raised by (i) the most recent internal quality-control review, or peer review, of the auditing firm, or (ii) any inquiry or investigation by
governmental or professional authorities, within the preceding five years, regarding one or more independent audits carried out by the auditing firm; and any steps taken to deal with any such issues;
describing all relationships between the independent auditor and the Company consistent with Independence Standards Board Standard No. 1; and
assuring that Section 10A of the Securities Exchange Act of 1934 has not been implicated;
review and evaluate the lead partner of the independent auditor;
consider whether the audit engagement team partners should be rotated more frequently than is required by law, so as to assure continuing auditor independence;