ADT 2006 Annual Report Download - page 56

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 NYSE. The Audit Committee
operates under a revised charter approved by the Board in September 2005, which 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 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. 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 29, 2006, 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 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 29, 2006 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, 2006
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