Quest Diagnostics 2004 Annual Report Download - page 29

2. Agenda. The Chair of the Committee shall develop and set the Committee’s agenda, in
consultation with management. The agenda and information concerning the business to be
conducted at each Committee meeting shall, to the extent practical, be communicated to the
members of the Committee in advance of each meeting.
3. Report to Board. At each regular meeting of the Board, the Committee shall report to the Board
on any meetings held or actions taken by the Committee since the last regular meeting of the
Board with such recommendations as the Committee shall deem appropriate.
4. Self-Evaluation; Assessment of Charter. The Committee shall conduct an annual self-evaluation of its
performance and shall report to the Board the results of the self-evaluation. The performance
evaluation of the Committee shall be conducted in such manner as the Committee deems
appropriate. The Committee shall assess the adequacy of this Charter periodically (not less than
annually) and recommend any changes to the Board.
Authority and Duties
In furtherance of its purpose, the Committee shall:
•Independent Auditor's Qualifications and Independence:
(a) Be directly responsible for the appointment, retention, compensation, evaluation and
oversight of the work of the independent auditor employed by the Company to audit its
financial statements or perform related services, including the resolution of disagreements
between management and the independent auditor regarding financial reporting. The
independent auditor shall report directly to the Committee and, although the auditor
appointment may be subject to stockholder ratification, the Board and the Committee
shall retain the discretion to retain the independent auditor and may change the
appointment of the independent auditor at any time if they determine that such change is
in the best interests of the Company and its shareholders.
(b) Be directly responsible for the appointment, compensation, retention and oversight of the
work of any other registered public accounting firm engaged for the purpose of preparing
or issuing an audit report or to perform audit, review or attestation services, which the
firm shall also report directly to the Committee.
(c) Have the sole authority to pre-approve, or to adopt appropriate procedures to pre-
approve, all audit and non-audit services to be provided by the independent auditor.
(d) Obtain and review with the lead audit partner, annually or more frequently as the
Committee considers appropriate, a report by the independent auditor describing: the
independent auditor’s internal quality-control procedures; any material issues raised by the
most recent internal quality-control review, or peer review, of the independent auditor, or
by any inquiry, review or investigation by governmental, professional or other regulatory
authorities, within the preceding five years, respecting one or more independent audits
carried out by the independent auditor, and any steps taken to deal with these issues; and
(to assess the independent auditor’s independence) all relationships between the
independent auditor and the Company, including each non-audit service provided to the
Company and the matters set forth in Independence Standards Board No. 1.
(e) Review the experience, qualifications and performance of the senior members of the
independent auditor team.
(f) Discuss with management the timing and process for implementing the rotation of the
lead audit partner, the concurring partner and any other active audit engagement team
partner and consider whether there should be a regular rotation of the audit firm itself.
(g) Pre-approve the hiring of any employee or former employee of the independent auditor
who was a member of the Company’s independent audit team during the preceding three
fiscal years. In addition, the Committee shall pre-approve the hiring of any employee or
former employee of the independent auditor (within the preceding three fiscal years) for
senior positions within the Company, regardless of whether that person was a member of
the Company’s audit team.
Quest Diagnostics Incorporated ?2004 Proxy Statement ?27