This excerpt taken from the DKS DEF 14A filed Apr 20, 2009.
Oversight and Monitoring of the Companys Financial Statements and Audits.
16. The Audit Committee will review and discuss the annual audited financial statements (prior to the filing of its Form 10-K) and quarterly financial statements (prior to the filing of its Form 10-Q) with Management, the Internal Auditors and the Outside Auditor, including reviewing the Companys specific disclosures under managements discussion and analysis in those reports. The Audit Committee will recommend to the Board whether the audited financial statements should be included in the Companys Form 10-K.
17. The Audit Committee will, as it deems necessary:
A. review and discuss with Management, and to the extent the Audit Committee deems necessary or appropriate, the Internal Auditors and the Outside Auditor, the Companys disclosure controls and procedures that are designed to ensure that the reports the Company files with the Commission comply with the Commissions rules and forms.
B. review and discuss quarterly reports from the Outside Auditor on:
(i) all critical accounting policies and practices to be used;
(ii) all alternative treatments under GAAP for policies and practices related to material items that have been discussed with Management, including ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the Outside Auditor;
(iii) the internal controls adhered to by the Company, Management, and the Companys financial, accounting and internal auditing personnel, and the impact of each on the quality and reliability of the Companys financial reporting;
(iv) other material written communications between the Outside Auditor and Management, such as any management letter or schedule of unadjusted differences.
C. discuss in advance with Management the Companys practice with respect to the types of information to be disclosed and the types of presentations to be made in earnings press releases, including the use, if any, of pro forma or adjusted non-GAAP information, as well as financial information and earnings guidance provided to analysts and rating agencies.
D. discuss with Management and the Outside Auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures and aggregate contractual obligations on the Companys financial statements.
E. discuss with Management the Companys major financial risk exposures and the steps Management has taken to monitor and control such exposures, including the Companys risk assessment and risk management policies.
F. discuss with the Outside Auditor the matters required to be discussed by Statement on Auditing Standards (SAS) No. 61, as amended (AICPA Professional Standards, Vol. 1. AU Section 380), and as adopted by the PCAOB in Rule 3200T, relating to the conduct of the audit. In particular, discuss:
(i) the adoption of, or changes to, the Companys significant internal auditing and accounting principles and practices as suggested by the Outside Auditor, Internal Auditors or Management; and
(ii) the management letter provided by the Outside Auditor and the Companys response to that letter.
G. receive and review disclosures, including any qualifications attached to the disclosure, made to the Audit Committee by the Companys Chief Executive Officer and Chief Financial Officer during their certification process for the Companys Form 10-K and Form 10-Q about (a) any significant deficiencies in the design or operation of internal controls or material weakness therein, (b) any fraud involving Management or other associates who have a significant role in the Companys internal controls and (c) any significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of the evaluation.
H. discuss with the Outside Auditors any problems difficulties or disputes with Management encountered during the course of the audit and Managements response.
I. in accordance with section 303A of the NYSE Listed Company Manual, generally discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies.