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This excerpt taken from the DKS DEF 14A filed Apr 20, 2009. Oversight
and Monitoring of the Company’s 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 Company’s specific disclosures
under management’s discussion and analysis in those
reports. The Audit Committee will recommend to the Board whether
the audited financial statements should be included in the
Company’s
Form 10-K.
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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 Company’s disclosure
controls and procedures that are designed to ensure that the
reports the Company files with the Commission comply with the
Commission’s 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 Company’s financial, accounting and
internal auditing personnel, and the impact of each on the
quality and reliability of the Company’s 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 Company’s
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 Company’s financial statements.
E. discuss with Management the Company’s major
financial risk exposures and the steps Management has taken to
monitor and control such exposures, including the Company’s
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 Company’s
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 Company’s response to that letter.
G. receive and review disclosures, including any
qualifications attached to the disclosure, made to the Audit
Committee by the Company’s Chief Executive Officer and
Chief Financial Officer during their certification process for
the Company’s
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 Company’s 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 Management’s 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.
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