Pizza Hut 2008 Annual Report Download - page 99

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without independent verification, on management’s representation that the financial statements have been
prepared with integrity and objectivity and in conformity with accounting principles generally accepted in
the U.S. and on the opinion of the independent auditors included in their report on the Company’s
financial statements. The Committee has also relied, without independent verification, on management’s
representation that the Company’s internal control over financial reporting is effective and on the opinion
of the independent auditors included in their report on the Company’s internal control over financial
reporting.
What matters have members of the Audit Committee discussed with management and the independent
auditors?
As part of its oversight of the Company’s financial statements, the Committee reviews and discusses
with both management and the Company’s independent auditors all annual and quarterly financial
statements prior to their issuance. During 2008, management advised the Committee that each set of
financial statements reviewed had been prepared in accordance with accounting principles generally
accepted in the U.S., and reviewed significant accounting and disclosure issues with the Committee. These
reviews include discussions with the independent auditors of matters required to be discussed pursuant to
Statement on Auditing Standards No. 61 (Communication with Audit Committees), including the quality (not
merely the acceptability) of the Company’s accounting principles, the reasonableness of significant
judgments, the clarity of disclosures in the financial statements and disclosures related to critical
accounting practices. The Committee has also discussed with KPMG LLP matters relating to its
independence, including a review of audit and non-audit fees and the written disclosures and letter
received from KPMG LLP required by applicable requirements of the Public Company Accounting
Oversight Board regarding KPMG LLP’s communications with the Committee concerning independence.
The Committee also considered whether non-audit services provided by the independent auditors are
compatible with the independent auditors’ independence. The Committee also received regular updates,
and written summaries as required by the PCAOB rules (for tax services), on the amount of fees and scope
of audit, audit-related and tax services provided.
In addition, the Committee reviewed key initiatives and programs aimed at strengthening the
effectiveness of the Company’s internal and disclosure control structure. As part of this process, the
Proxy Statement
Committee continued to monitor the scope and adequacy of the Company’s internal auditing program,
reviewing staffing levels and steps taken to implement recommended improvements in internal procedures
and controls. The Committee also reviews and discusses legal and compliance matters with management,
and, as necessary or advisable, the Company’s independent auditors.
Has the Audit Committee made a recommendation regarding the audited financial statements for fiscal 2008?
Based on the Committee’s discussions with management and the independent auditors and the
Committee’s review of the representations of management and the report of the independent auditors to
the Board of Directors, and subject to the limitations on the Committee’s role and responsibilities referred
to above and in the Audit Committee Charter, the Committee recommended to the Board of Directors
that it include the audited consolidated financial statements in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 27, 2008 for filing with the SEC.
Who prepared this report?
This report has been furnished by the members of the Audit Committee:
J. David Grissom, Chairperson Robert Holland, Jr.
Kenneth G. Langone Jonathan S. Linen
Thomas C. Nelson
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