Pottery Barn 2006 Annual Report Download - page 127

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What other matters did we discuss with Deloitte?
During fiscal 2006, 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;
• Deloitte’s annual letter describing internal quality control procedures;
• 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 stock-based compensation; and
• Matters required to be discussed pursuant to Statement on Auditing Standards No. 61 (“Communication
with Audit Committees”), as modified and supplemented, including the quality of the company’s
accounting principles, the soundness of significant judgments and the clarity of disclosures in the
company’s financial statements.
What is our policy regarding pre-approval of audit and non-audit services performed by Deloitte?
All services performed by Deloitte, whether audit or non-audit services, must be pre-approved by us or a
designated member of our committee, whose decisions must be reported to us at our next meeting. Pre-approval
must be obtained before Deloitte performs the services but cannot be obtained more than one year before
performance begins. Approval can be for general classes of permitted services such as annual audit services or
tax consulting services. A written engagement letter, including a description of the permitted services, the dates
of the engagement and the estimated fees for such services, must be approved by the Audit and Finance
Committee in accordance with these procedures before performance begins.
Did we review the fees billed by Deloitte for fiscal 2006?
Yes. We reviewed and discussed the fees billed by Deloitte for services in fiscal 2006, which are described in
detail below. We determined that the provision of non-audit services was compatible with Deloitte’s
independence.
Did we review the company’s audited financial statements for fiscal 2006?
Yes. We reviewed and discussed the company’s audited financial statements for fiscal 2006, and we
recommended to the Board that the company’s audited financial statements be included in the company’s Annual
Report on Form 10-K for fiscal 2006 for filing with the SEC.
Who prepared this report?
Members of the Audit and Finance Committee, Adrian T. Dillon, Michael R. Lynch and Richard T. Robertson,
prepared this report.
AUDIT AND RELATED FEES
During fiscal 2006 and 2005, Deloitte did not perform any prohibited non-audit services for us.
Audit Fees
Deloitte billed approximately $1,235,500 for fiscal 2006 and $1,107,000 for fiscal 2005 for professional services
to audit our consolidated financial statements included in our Annual Report on Form 10-K and to review our
condensed, consolidated financial statements included in our quarterly reports on Form 10-Q. Fees for audit
services billed also consisted of fees for the attestation of management’s assessment of internal control as
required by Section 404 of the Sarbanes-Oxley Act of 2002.
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