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This excerpt taken from the ELN 20-F filed Mar 30, 2006. Item 16C. Principal
Accountant Fees and Services
Our principal accountants are KPMG. The table below summarizes
the fees for professional services rendered by KPMG for the
audit of our Consolidated Financial Statements and fees billed
for other services rendered by KPMG (in millions):
Audit
Committee
The audit committee, composed entirely of non-executive
directors, helps the board in its general oversight of our
accounting and financial reporting practices, internal controls
and audit functions, and is directly responsible for the
appointment, compensation and oversight of our independent
auditors. The audit committee periodically reviews the
effectiveness of the system of internal control. It monitors the
adequacy of internal accounting practices, procedures and
controls, and reviews all significant changes in accounting
policies. The committee meets regularly with the internal and
external auditors and addresses all issues raised and
recommendations made by them. The members of the committee in
2005 were Dr. Gillespie (chairman), Mr. Kennedy
(appointed September 9, 2005), Mr. McGowan and
Ms. Gray, who was appointed to the audit committee on
February 3, 2005, and served on the committee until
Mr. Kennedy’s appointment. Mr. Kennedy qualifies
as an audit committee financial expert.
Consistent with SEC policies regarding auditor independence, the
audit committee has responsibility for appointing, setting
compensation, overseeing the work of and ensuring the
independence of the independent auditor. In recognition of this
responsibility, the audit committee has established a policy to
pre-approve all audit and permissible non-audit services
provided by the independent auditor. Prior to engagement of the
independent auditor for the next year’s audit, management
will submit a list of services and related fees expected to be
rendered during that year within each of four categories of
services to the audit committee for approval: audit services;
audit-related services; tax services; and other fees.
Prior to engagement, the audit committee pre-approves all
independent auditor services within each category. The fees are
budgeted and the audit committee requires the independent
auditor and management to report actual fees versus the budget
periodically throughout the year by category of service. During
the year, circumstances may arise when it may become necessary
to engage the independent auditor for additional services not
contemplated in the original pre-approval categories. In those
instances, the audit committee requires specific pre-approval
before engaging the independent auditor.
The audit committee may delegate pre-approval authority to one
or more of its members. The member to whom such authority is
delegated reports any pre-approval decisions to the audit
committee at its next scheduled meeting.
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