Kroger 2015 Annual Report Download - page 63

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61
Item No. 3 Ratification of the Appointment of Kroger’s Independent Auditor
You are being asked to ratify the appointment of Kroger’s independent auditor,
PricewaterhouseCoopers LLC. The Board of Directors recommends that you vote FOR
the ratification of PricewaterhouseCoopers LLP as our independent registered public
accounting firm.
The primary function of the Audit Committee is assist the Board of Directors in fulfilling its oversight
responsibilities regarding the Company’s financial reporting and accounting practices including the
integrity of the Company’s financial statements; the Company’s compliance with legal and regulatory
requirements; the independent public accountants’ qualifications and independence; the performance
of the Company’s internal audit function and independent public accountants; and the preparation of the
Audit Committee Report. The Audit Committee performs this work pursuant to a written charter approved
by the Board of Directors. The Audit Committee charter most recently was revised during fiscal 2012
and is available on the Company’s website at ir.kroger.com under Corporate Governance – Committee
Composition. The Audit Committee has implemented procedures to assist it during the course of each
fiscal year in devoting the attention that is necessary and appropriate to each of the matters assigned to
it under the Committee’s charter. The Audit Committee held five meetings during fiscal year 2015.
Selection of Independent Auditor
The Audit Committee of the Board of Directors is directly responsible for the appointment,
compensation, retention, and oversight of Kroger’s independent auditor, as required by law and by
applicable NYSE rules. On March 9, 2016, the Audit Committee appointed PricewaterhouseCoopers
LLP as Kroger’s independent auditor for the fiscal year ending January 28, 2017.
In determining whether to reappoint the independent auditor, our Audit Committee:
• Reviews PricewaterhouseCoopers LLP’s independence and performance;
• Reviews, in advance, all non-audit services provided by PricewaterhouseCoopers LLP, specifically
with regard to the effect on the firm’s independence;
• Conducts an annual assessment of PricewaterhouseCoopers LLP’s performance, including an
internal survey of their service quality by members of management and the Audit Committee;
• Conducts regular executive sessions with PricewaterhouseCoopers LLP;
• Conducts regular executive sessions with the Vice President of Internal Audit;
• Considers PricewaterhouseCoopers LLP’s familiarity with our operations, businesses, accounting
policies and practices and internal control over financial reporting;
• Reviews candidates for the lead engagement partner in conjunction with the mandated rotation of
the public accountants’ lead engagement partner;
• Reviews recent Public Company Accounting Oversight Board reports on PricewaterhouseCoopers
LLP and its peer firms; and
• Obtains and reviews a report from PricewaterhouseCoopers LLP describing all relationships
between the independent auditor and Kroger at least annually to assess the independence of the
internal auditor.
As a result, the members of the Audit Committee believe that the continued retention of
PricewaterhouseCoopers LLP to serve as our independent registered public accounting firm is in the best
interests of our company and its shareholders.
While shareholder ratification of the selection of PricewaterhouseCoopers LLP as our independent
auditor is not required by Kroger’s Regulations or otherwise, the Board of Directors is submitting the
selection of PricewaterhouseCoopers LLP to shareholders for ratification, as it has in past years, as a
good corporate governance practice. If the shareholders fail to ratify the selection, the Audit Committee