ADT 2005 Annual Report Download - page 63

AUDIT COMMITTEE REPORT
The Audit Committee of the Board is composed of four directors, each of whom the Board has
determined meets the independence and experience requirements of the New York Stock Exchange.
The Audit Committee operates under a revised charter approved by the Board in September 2005,
which is attached as Appendix A to this Proxy Statement and is posted on our website. As more fully
described in its charter, the Audit Committee oversees Tyco’s financial reporting process on behalf of
the Board. Management has the primary responsibility for the financial statements and the reporting
process, assures that the Company develops and maintains adequate financial controls and procedures,
and monitors compliance with these processes. Tyco’s independent auditors are responsible for
performing an audit in accordance with auditing standards generally accepted in the United States of
America to obtain reasonable assurance that Tyco’s consolidated financial statements are free from
material misstatement and expressing an opinion on the conformity of the financial statements with
accounting principles generally accepted in the United States of America. The internal auditors are
responsible to the Audit Committee and the Board for testing the integrity of the financial accounting
and reporting control systems and such other matters as the Audit Committee and Board determine.
In this context, the Audit Committee has reviewed the consolidated financial statements for the
fiscal year ended September 30, 2005, and has met and held discussions with management, the internal
auditors and the independent auditors concerning the consolidated financial statements, as well as the
report of management and the independent auditor’s opinion thereon regarding the Company’s internal
control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.
Management represented to the Committee that Tyco’s consolidated financial statements were prepared
in accordance with generally accepted accounting principles. The Committee discussed with the
independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61,
as amended by Statement of Auditing Standards No. 90 (Audit Committee Communications).
In addition, the Committee has discussed with the independent auditors the auditors’
independence from Tyco and its management, including the matters in the written disclosures and the
letter from the independent auditors required by the Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees).
Based upon the Committee’s review and discussions referred to above, the Committee
recommended that the Board include Tyco’s audited consolidated financial statements in Tyco’s Annual
Report on Form 10-K for the fiscal year ended September 30, 2005 filed with the Securities and
Exchange Commission.
Submitted by the Audit Committee,
Jerome B. York, Chair
Brian Duperreault
Bruce S. Gordon
Brendan R. O’Neill
December 7, 2005
2006 Proxy Statement 45