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YUM! BRANDS, INC.-2014Proxy Statement 63
Proxy Statement
AUDIT COMMITTEE REPORT
generally accepted in the U.S. and that the Company’s
internal control over financial reporting is effective. The
Committee has also relied, without independent verification,
on the opinion of the independent auditors included in their
report regarding the Company’s financial statements and
effectiveness of 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
2013, 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 included
discussions with the independent auditors of matters required
to be discussed pursuant to Public Company Accounting
Oversight Board (“PCAOB”) Auditing Standard No. 16
(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 PCAOB 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 and other services), on the amount
of fees and scope of audit, audit-related, tax and other
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 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 2013?
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 28, 2013 for filing with the SEC.
Who prepared this report?
This report has been furnished by the members of the Audit Committee:
Thomas C. Nelson, Chairperson Bonnie G. Hill
Mirian M. Graddick-Weir Jonathan S. Linen
J. David Grissom