Pottery Barn 2006 Annual Report Download - page 126

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What is the role of the Audit and Finance Committee?
Our role is detailed in the Audit and Finance Committee Charter, which was amended and restated by the Board
on March 15, 2006. The Audit and Finance Committee Charter is available on the company’s website at
www.williams-sonomainc.com and is attached to this Proxy Statement as Exhibit C. The Audit and Finance
Committee Charter is also available in print to any shareholder who requests it. Specifically, we:
• Assist the Board in its oversight of the integrity of the company’s financial statements; the qualifications,
independence and performance of the company’s independent auditor; the performance of the company’s
internal audit function; and compliance by the company with legal and regulatory requirements;
• Prepare the report that the SEC rules require to be included in the company’s annual proxy statement; and
• 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 2006?
The Audit and Finance Committee held a total of five meetings during fiscal 2006, and we took the following
actions, among other things:
• Reviewed and discussed the company’s audited financial statements for fiscal 2006 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.
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