Pottery Barn 2005 Annual Report Download - page 120

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• Oversee the financial impact of selected strategic initiatives of the company and review selected
financing, dividend and stock repurchase policies and plans.
How do we meet our responsibilities?
We perform the following functions:
• Monitor the integrity of the company’s financial reports, earnings, sales and guidance press releases and
other company financial information;
• Appoint and/or replace the independent registered public accounting firm, pre-approve all audit and
non-audit services of the independent registered public accounting firm and assess its qualifications and
independence;
• Review the performance of the company’s internal audit function, the company’s auditing, accounting
and financial reporting procedures, and the company’s independent registered public accounting firm;
• Monitor the company’s compliance with legal and regulatory requirements;
• Monitor the company’s system of internal controls and internal control over financial reporting;
• Retain independent legal, accounting or other advisors when necessary and appropriate; and
• Review the financial impact on the company of selected strategic initiatives and selected financing plans
and develop and recommend policies related to dividend and stock repurchase programs.
How did we perform our responsibilities in fiscal 2005?
The Audit and Finance Committee held a total of six meetings during fiscal 2005, and we took the following
actions, among other things:
• Reviewed and discussed the company’s audited financial statements for fiscal 2005 with management and
Deloitte;
• Reviewed and discussed the company’s periodic filings on Forms 10-K and 10-Q with management and
Deloitte;
• Reviewed and discussed all company earnings, sales and guidance press releases with management;
• Reviewed and discussed the company’s internal control over financial reporting with management and
Deloitte;
• Met with Deloitte, with and without management present, to discuss the overall quality of the internal and
external audit process and the financial reporting process; and
• Discussed with Deloitte its independence from the company and management based on the following:
(i) our confirmation that no member of Deloitte’s audit team is or has been employed by the company in a
financial reporting oversight role; and (ii) our review of audit and non-audit fees and the written
disclosures and letter from Deloitte as required by Independence Standards Board Standard No. 1
(“Independence Discussions with Audit Committee”), as modified and supplemented.
What other matters did we discuss with Deloitte?
During fiscal 2005, we discussed the following other matters, among other things, with Deloitte:
• Deloitte’s responsibilities in connection with the audit of the company’s financial statements and matters
relating to Deloitte’s independence;
• The company’s internal control over financial reporting;
• Any significant issues arising during the audit and any other matters relating to the conduct of the audit of
the company’s financial statements, including accounting for the company’s leases; and
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