Pizza Hut 2008 Annual Report Download - page 98

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AUDIT COMMITTEE REPORT
Who serves on the Audit Committee of the Board of Directors?
The members of the Audit Committee are J. David Grissom, Chair, Robert Holland, Jr., Kenneth G.
Langone, Jonathan S. Linen and Thomas C. Nelson.
The Board of Directors has determined that each member of the Committee is ‘‘independent’’ within
the meaning of the applicable rules of both the NYSE and the SEC. The Board of Directors has also
determined that each member of the Committee is financially literate, as defined under the rules of the
NYSE. All Committee members likely have accounting or related financial management expertise as such
qualifications are defined under the rules of the NYSE. The Board determined that J. David Grissom has
such accounting or related financial management expertise. In addition, the Board determined that
J. David Grissom is an ‘‘audit committee financial expert’’ within the meaning of the rules of the SEC.
What document governs the activities of the Audit Committee?
The Audit Committee operates under a written charter adopted by the Board of Directors. The
Committee’s responsibilities are set forth in this charter, which was amended and restated effective
March 27, 2009 The charter is reviewed by management at least annually, and any recommended changes
are presented to the Audit Committee for review and approval. The charter is available on our Web site at
www.yum.com/investors/governance.
What are the responsibilities of the Audit Committee?
The Audit Committee assists the Board in fulfilling its responsibilities for general oversight of the
integrity of the Company’s financial statements, the adequacy of the Company’s system of internal controls
and procedures and disclosure controls and procedures, the Company’s risk management, the Company’s
compliance with legal and regulatory requirements, the independent auditors’ qualifications and
independence and the performance of the Company’s internal audit function and independent auditors.
The Committee has sole authority over the selection of the Company’s independent auditors and manages
the Company’s relationship with its independent auditors (who report directly to the Committee). The
Proxy Statement
Committee has the authority to obtain advice and assistance from outside legal, accounting or other
advisors as the Committee deems necessary to carry out its duties and receive appropriate funding, as
determined by the Committee, from the Company for such advice and assistance.
The Committee met 9 times during 2008. The Committee schedules its meetings with a view to
ensuring that it devotes appropriate attention to all of its tasks. The Committee’s meetings generally
include private sessions with the Company’s independent auditors and with the Company’s internal
auditors, in each case without the presence of the Company’s management, as well as executive sessions
consisting of only Committee members. The Committee also meets with senior management from time to
time. In addition to the scheduled meetings, senior management confers with the Committee or its Chair
from time to time, as senior management deems advisable or appropriate, in connection with issues or
concerns that arise throughout the year.
Management is responsible for the Company’s financial reporting process, including its system of
internal control over financial reporting, and for the preparation of consolidated financial statements in
accordance with accounting principles generally accepted in the U.S. The Company’s independent auditors
are responsible for auditing those financial statements in accordance with professional standards and
expressing an opinion as to their material conformity with U.S. generally accepted accounting principles
and for auditing the effectiveness of the Company’s internal control over financial reporting. The
Committee’s responsibility is to monitor and review the Company’s financial reporting process and discuss
management’s report on the Company’s internal control over financial reporting. It is not the Committee’s
duty or responsibility to conduct audits or accounting reviews or procedures. The Committee has relied,
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