Staples 2004 Annual Report Download - page 57

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• alternative treatments of financial information within generally accepted accounting principles that
have been discussed with Company management, ramifications of the use of such alternative
disclosures and treatments, and the treatment preferred by the independent auditor; and
• other material written communications between the independent auditor and Company management,
such as any management letter or schedule of unadjusted differences.
• review with the independent auditor:
• audit problems or difficulties the independent auditor encountered in the course of the audit work
and management’s response, including any restrictions on the scope of the auditor’s activities or on
access to requested information and significant disagreements with management;
• major issues as to the adequacy of the Company’s internal controls and any special audit steps
adopted in light of material control deficiencies;
• analyses prepared by management and/or the independent auditor setting forth significant financial
reporting issues and judgments made in connection with the preparation of the financial statements,
including analyses of the effects of alternative GAAP methods; and
• the effect of regulatory and accounting initiatives, as well as off balance sheet structures, on the
financial statements.
Review of Audited Financial Statements
7. Discussion of Audited Financial Statements. The Audit Committee shall review and discuss with the
Company’s management and independent auditor the Company’s audited financial statements, including the
Company’s disclosures under ‘‘Management’s Discussion and Analysis of Financial Condition and Results of
Operations,’’ and the matters about which Statement on Auditing Standards No. 61 (Codification of
Statements on Auditing Standards, AU §380) requires discussion.
8. Recommendation to Board Regarding Financial Statements. The Audit Committee shall consider whether it
will recommend to the Board of Directors that the Company’s audited financial statements be included in
the Company’s Annual Report on Form 10-K.
9. Audit Committee Report. The Audit Committee shall prepare for inclusion in a proxy or information
statement of the Company relating to an annual meeting of security holders at which directors are to be
elected (or special meeting or written consents in lieu of such meeting), the report described in Item 306 of
Regulation S-K.
Review of Other Financial Disclosures
10. Independent Auditor Review of Interim Financial Statements. The Audit Committee shall direct the
independent auditor to use its best efforts to perform all reviews of interim financial information prior to
disclosure by the Company of such information and to discuss promptly with the Audit Committee and the
Chief Financial Officer any matters identified in connection with the auditor’s review of interim financial
information which are required to be discussed by applicable auditing standards. The Audit Committee shall
direct management to advise the Audit Committee in the event that the Company proposes to disclose
interim financial information prior to completion of the independent auditor’s review of interim financial
information.
11. Earnings Release and Other Financial Information. The Audit Committee shall review and discuss generally
the types of information to be disclosed in the Company’s earnings press releases (including any use of ‘‘pro
forma’’ or ‘‘adjusted’’ non-GAAP, information), as well as financial information and earnings guidance
provided to analysts, rating agencies and others.
12. Quarterly Financial Statements. The Audit Committee shall discuss with the Company’s management and
independent auditor the Company’s quarterly financial statements, including the Company’s disclosures
under ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations.’’
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