TTWO » Topics » Report of the Audit Committee

This excerpt taken from the TTWO DEF 14A filed Feb 28, 2007.

Report of the Audit Committee

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. The Company’s management has the primary responsibility for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed the audited consolidated financial statements in the Company’s Annual Report on Form 10-K with Company management, including a discussion of the quality, not just the acceptability, of the accounting principles; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements.

The Committee reviewed with the independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such matters as are required to be discussed with the Committee by Statement on Auditing Standards No. 61, Communication With Audit Committees, (as amended), other standards of the Public Company Accounting Oversight Board (United States), rules of the Securities and Exchange Commission, and other applicable regulations. In addition, the Committee has discussed with the independent registered public accounting firm the firm’s independence from Company management and the Company, including the matters in the letter from the firm required by Independence Standards Board Standard No.1, Independence Discussion with Audit Committees, and considered the compatibility of non-audit services with the independent registered public accounting firm’s independence.

The Committee also reviewed management’s report on its assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s report on management’s assessment and the effectiveness of the Company’s internal control over financial reporting.

The Committee discussed with the Company’s vice president of internal audit and independent registered public accounting firm the overall scope and plans for their respective audits. The Committee meets with the Company’s vice president of internal audit and representatives  of the independent registered public accounting firm, with and without management present, to discuss the results of their examinations; their evaluations of the Company’s internal control, including internal control over financial reporting; and the overall quality of the Company’s financial reporting.

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In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Annual Report on Form 10-K for the year ended October 31, 2006 filed by the Company with the Securities and Exchange Commission (“SEC”). The Committee and the Board also have recommended, subject to stockholder approval, the selection of the Company’s independent registered public accounting firm,

The Board of Directors has adopted a written charter for the Audit Committee, which was attached as Exhibit B to the Company’s definitive Proxy Statement on Schedule 14A filed with the SEC on May 16, 2005. The Audit Committee has implemented an internal audit function. The Audit Committee held fifteen meetings during the fiscal year ended October 31, 2006. The Committee is comprised solely of independent directors as defined by under the rules of the NASDAQ Stock Market’s listing standards and Rule 10A-3 of the Securities Exchange Act of 1934.

Audit Committee Chair, John Levy*

Audit Committee Member, Todd Emmel

Audit Committee Member, Michael Malone*

* became a member of the Committee in March 2006

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