This excerpt taken from the TLI DEF 14A filed Sep 2, 2005.
The Board Members, including a majority of the Independent Board Members have selected KPMG LLP (KPMG) as the independent registered public accounting firm for the Funds. KPMG, in accordance with Independence Standards Board Standard No. 1 (ISB No. 1), has confirmed to each Audit Committee that it is an independent registered public accounting firm with respect to the Funds.
PricewaterhouseCoopers LLP (PwC) served as the independent registered public accounting firm of certain Funds* for the two most recent fiscal years. PwC resigned as the independent registered public accounting firm for those Funds effective June 22, 2005. Each affected Funds Audit Committee approved the engagement of KPMG as the Funds new independent registered public accounting firm for the Funds current fiscal year. A majority of the Funds Board Members, including a majority of the independent Board Members, approved the appointment of KPMG, subject to the right of the Fund, by a majority vote of the shareholders at any meeting called for that purpose, to terminate the appointment without penalty.
The reports of PwC on each Funds financial statements for each of the last two fiscal years contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. There have been no disagreements with PwC during each Funds two most recent fiscal years and any subsequent interim period on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of PwC, would have caused them to make reference thereto in their reports on the financial statements for such years.
No representatives of KPMG or PwC will be present at the Meetings.
Appendix O sets forth for each Fund, for each of the applicable Funds two most recent fiscal years, the fees billed by the Funds independent registered public accounting firm for all audit and non-audit services provided directly to the Fund. The fee information in Appendix O is presented under the following captions:
(i) Audit Feesfees related to the audit and review of the financial statements included in annual reports and registration statements, and other services that are normally provided in connection with statutory and regulatory filings or engagements.
(ii) Audit-Related Feesfees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews not required by regulators.
(iii) Tax Feesfees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis reviews.
(iv) All Other Feesfees for products and services provided to the Fund other than those reported under Audit Fees, Audit-Related Fees and Tax Fees.
The charter of each Audit Committee requires that the Audit Committee shall approve (a) all audit and permissible non-audit services to be provided to each Fund and (b) all permissible non-audit services to be provided by the Funds independent auditors to the investment adviser and any service providers controlling, controlled by or under common control with the investment adviser that provide ongoing services to the Fund (Covered Service Providers) if the engagement relates directly to the operations and financial reporting of the Fund. The Audit Committee may implement policies and procedures by which such services are approved other than by the full Committee.
No Audit Committee may approve non-audit services that the Committee believes may impair the independence of the auditors. Permissible non-audit services include any professional services (including tax services) that are not prohibited services as described below provided to the Fund by the independent auditors, other than those provided to a Fund in connection with an audit or a review of the financial statements of the Fund. Permissible non-audit services may not include (i) bookkeeping or other services related to the accounting records or financial statements of the Fund; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the Public Company Accounting Oversight Board determines, by regulation, is impermissible.
Pre-approval by the Audit Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to a Fund, its Adviser and any Covered Service Provider constitutes not more than 5% of the total amount of revenues paid to the independent auditors during the fiscal year in which the permissible non-audit services are provided to (a) the Fund, (b) the Adviser and (c) any Covered Service Provider during the fiscal year in which services are provided that would not have to be approved by the Committee; (ii) the permissible non-audit services were not recognized by the Fund at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Audit Committee and approved by the Committee (or its delegate(s)) prior to completion of the audit.
For each Funds two most recent fiscal years, there were no services rendered by KPMG or PwC to the Funds for which the pre-approval requirement was waived.
Non-audit fees billed for services rendered to the Funds and the Advisers or any entity controlling, controlled by or under common control with any of the Advisers that provides ongoing services to the Funds were $3.5 million and $6.4 million, respectively, in 2003 and 2004 for PwC and $0 and $75,000, respectively, in 2003 and 2004 for KPMG. For the period from May 6, 2003 through December 31, 2004, PwC billed the Adviser or any Covered Service Provider $1.39 million for non-audit services. For the period from May 6, 2003 through December 31, 2004, KPMG did not bill the Adviser or any Covered Service Provider for non-audit services.
Each Audit Committee has considered whether the provision of non-audit services that were rendered by KPMG or PwC to the applicable Adviser and Covered Service Providers that were not pre-approved (not requiring pre-approval) is compatible with maintaining such auditors independence. All services provided by KPMG or PwC to each Fund, its Adviser or Covered Service Providers that were required to be pre-approved were pre-approved as required.