LensCrafters 2006 Annual Report Download - page 81

ANNUAL REPORT ON
CORPORATE GOVERNANCE 2006 |81 <
management principles; appropriateness of the Company's organizational structure for
competence aspects, internal control system and administrative-accounting system, as well as the
reliability of this system to correctly represent management facts.
The Board of Statutory Auditors expresses its duly formed opinion at the Shareholders’ Meeting
with respect to the appointment of external auditors.
The Board of Statutory Auditors was identified by the Board of Directors, in the meeting of April 28,
2005, as the appropriate body to act as the "Audit Committee", according to the provisions of the
Sarbanes-Oxley Act and SEC and the NYSE regulations (until the appointment of the current Board
of Statutory Auditors, such functions were performed by the Internal Control Committee) and it has
the following duties:
• Assesses the proposals made by auditing companies for the engagement as external auditors
of the Company and makes to the Shareholders’ meeting a grounded proposal with respect to
the appointment or revocation of the auditing company;
• Supervises the activities of the external auditors appointed to audit the accounts of the Group
and to provide related advisory services and additional auditing and certification services;
•Examines the periodic communications of the auditing company relating to: (a) the accounting
critical criteria and practices to be utilized; (b) the alternative accounting methodologies
provided by the accounting principles generally accepted, analyzed with the management, the
consequences of using such alternative methodologies and the relating information, as well as
the methodologies that the auditing company considers preferable; (c) any additional relevant
written communication exchanged by the auditing company with the management;
• Recommends to the Board ways of resolving any disputes between the management and the
external auditors in respect of financial reporting;
• Approves the procedures concerning: (i) receiving, archiving and treating the reports received
by the auditing company concerning accounting matters, internal control matters having an
accounting nature and matters regarding the audit; (ii) the confidential or anonymous
information received by employees concerning dubious accounting and auditing matters;
• Assesses any requests of making use of the services of the auditing company appointed for the
auditing of the financial statements to obtain additional allowed non-audit services, and reports
to the Board of Directors in such respect;
•Approves the procedures drawn up by the Person in Charge of the Internal Auditing for the prior
authorization of allowed non-audit services, to be analytically identified, and examines any
reports on the performance of the authorized services;
•Examines any reports of the Chief Executive Officer and the Chief Financial Officer relating to
any significant weak aspect in the conception or performance of the internal controls which may
reasonably negatively affect the capacity to register,draw up, summarize and disclose financial
reporting and the deficiencies found in the internal controls (Section 404 “Internal Controls over
financial reporting”);
• Examines any reports of the Chief Executive Officer and the Chief Financial Officer relating to any
fraud involving the management or the relevant officers in the context of the internal control system.
Pursuant to US regulation, the Chairman of the Board of Statutory Auditors, Mr. Marco Reboa, was
designed as Financial Expert of the Audit Committee.
Toperform the above duties, the Board of Statutory Auditors is endowed with the appropriate skills
and resources.
External Auditor. The external auditing services are provided by an external auditing company,