Pizza Hut 2012 Annual Report Download - page 79

YUM! BRANDS, INC.-2013Proxy Statement 61
Proxy Statement
AUDIT COMMITTEE REPORT
Who serves on the Audit Committee of the Board of Directors?
The members of the Audit Committee are Mirian M. Graddick-
Weir, J.David Grissom, Bonnie G. Hill, JonathanS. Linen and
ThomasC. Nelson, Chair.
The Board of Directors has determined that all of the members
of the Audit Committee are independent within the meaning of
applicable SEC regulations and the listing standards of the NYSE
and that Mr.Nelson, the chair of the Committee, is qualifi ed as
an audit committee fi nancial expert within the meaning of SEC
regulations. The Board has also determined that Mr.Nelson has
accounting and related fi nancial management expertise within
the meaning of the listing standards of the NYSE and that each
member is fi nancially literate within the meaning of the NYSE
listing standards.
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
November16,2012. 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 website at www.yum.com/investors/governance/
charters.asp.
What are the responsibilities of the Audit Committee?
The Audit Committee assists the Board in fulfi lling its responsibilities
for general oversight of the integrity of the Company’s fi nancial
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’
qualifi cations 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 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 2012. 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. 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 fi nancial reporting
process, including its system of internal control over fi nancial
reporting, and for the preparation of consolidated fi nancial
statements in accordance with accounting principles generally
accepted in the U.S. The Company’s independent auditors are
responsible for auditing those fi nancial 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 fi nancial reporting. The Committee’s responsibility is
to monitor and review the Company’s fi nancial reporting process
and discuss management’s report on the Company’s internal
control over fi nancial reporting. It is not the Committee’s duty or
responsibility to conduct audits or accounting reviews or procedures.
The Committee has relied, without independent verifi cation, on
management’s representations that the fi nancial statements have
been prepared with integrity and objectivity and in conformity with
accounting principles generally accepted in the U.S. and that the
Company’s internal control over fi nancial reporting is effective. The
Committee has also relied, without independent verifi cation, on
the opinion of the independent auditors included in their report
regarding the Company’s fi nancial statements and effectiveness
of internal control over fi nancial reporting.