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YUM! BRANDS, INC.-2016Proxy Statement80
Proxy Statement
AUDIT COMMITTEE REPORT
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, without independent verification, on management’s
representations that the financial 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 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
2015, 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 2015?
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26, 2015 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 Jonathan S. Linen
Michael Cavanagh Keith Meister
Brian Cornell