This excerpt taken from the PNC DEF 14A filed Mar 23, 2007.
INDEPENDENT AUDITORS FOR 2007
Our Boards Audit Committee is composed entirely of directors who are independent as defined in the New York Stock Exchanges corporate governance rules. Among other things, the Board has also determined that each committee member is financially literate and possesses accounting or related financial management expertise. The Board made these determinations in its business judgment, based on its interpretation of the NYSEs requirements for committee members. The Board has also determined that Mr. Chellgren, the chairman of the Audit Committee, and Mr. Kelson are each an audit committee financial expert. The regulations of the SEC define an audit committee financial expert as a person who has acquired certain attributes through education and experience that are particularly relevant to the functions of an audit committee.
Under the Audit Committees charter, the committee is responsible for selecting PNCs independent auditors pursuant to a well-organized process. The committee also evaluates and monitors the auditors qualifications, performance and independence. This evaluation includes a review and evaluation of the lead partner of the independent auditors. The committee also takes into account the opinions of management and PNCs General Auditor, who has supervisory responsibility for the internal audit function. You can learn more about the committees responsibilities with respect to the independent auditors in the committees charter, which is posted on the corporate governance section of the About PNCInvestor Relations page of our corporate website at www.pnc.com.
In 2006, the Audit Committee undertook a process to consider the selection of independent auditors for the 2007 audit. This process included consideration of audit firms in addition to Deloitte & Touche LLP (D&T), which is the firm that the Audit Committee engaged to act as PNCs independent auditor for the 2006 audit. The decision to evaluate more than one potential audit firm reflected the scheduled required rotation of the lead audit partner of D&T. Upon completion of this process, on November 15, 2006, the Audit Committee selected PricewaterhouseCoopers LLP as PNCs Independent Registered Public Accounting Firm for the year ending December 31, 2007. The Audit Committee reported this decision to the Board of Directors on November 16, 2006.
On February 14, 2007, the Audit Committee presented its conclusions regarding the independent auditors to our Board of Directors. Following this presentation, the Board voted unanimously to recommend that shareholders vote to ratify the Audit Committees selection of PricewaterhouseCoopers LLP as PNCs independent auditors for 2007.
The Audit Committee and Board have adopted a policy that if a majority of the votes cast at the annual meeting are against ratification, the committee will reconsider its selection of PricewaterhouseCoopers LLP. The committee will be under no obligation, however, to select new independent auditors. If the committee does select new independent auditors for 2007, shareholder ratification of the committees new selection will not be sought.