XM Radio 2015 Annual Report Download - page 59

•The Audit Committee pre-approves each proposed engagement to provide services not
previously included in the approved list of audit and non-audit services and for fees in excess
of amounts previously pre-approved.
The Audit Committee has delegated to the chair of the Audit Committee the authority to
approve permitted services by the independent registered public accounting firm so long as he or
she reports decisions to the Audit Committee at its next meeting.
All of the services covered under the captions “Audit Fees”, “Audit-Related Fees” and “Tax
Fees” were pre-approved by the Audit Committee.
Who is the Audit Committee’s financial expert?
Our board of directors has determined that Joan L. Amble, the chairwoman of the Audit
Committee and an independent director, is qualified as an “audit committee financial expert” within
the meaning of SEC regulations and that she is “financially sophisticated” within the meaning of the
NASDAQ listing standards.
REPORT OF THE AUDIT COMMITTEE
As described more fully in its charter, the purpose of the Audit Committee is to assist our
board of directors in its general oversight of our financial reporting, internal control and audit
functions. Management is responsible for the preparation, presentation and integrity of our
consolidated financial statements; accounting and financial reporting principles; and internal controls
and procedures designed to ensure compliance with accounting standards, applicable laws and
regulations. KPMG, our independent registered public accounting firm, is responsible for performing
an independent audit of our consolidated financial statements and the effectiveness of internal
control over financial reporting in accordance with auditing standards of the Public Company
Accounting Oversight Board (United States) (the “PCAOB”).
In this context, the Audit Committee has met and held discussions with management and the
independent registered public accounting firm regarding the fair and complete presentation of our
results and the assessment of our internal control over financial reporting. The Audit Committee has
discussed significant accounting policies applied by us in our financial statements, as well as, when
applicable, alternative accounting treatments. Management has represented to the Audit Committee
that our consolidated financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America, and the Audit Committee has reviewed and
discussed the consolidated financial statements with management and KPMG.
The Audit Committee also reviewed and discussed our compliance with Section 404 of the
Sarbanes-Oxley Act of 2002. In this regard, the Audit Committee reviewed and discussed, with
management and our independent registered public accounting firm, management’s annual report
on the effectiveness of internal control over financial reporting as of December 31, 2015 and
KPMG’s related attestation report.
The Audit Committee has discussed with KPMG the matters that are required to be discussed
under PCAOB standards. The Audit Committee discussed with KPMG matters required to be
discussed by Auditing Standard No. 16, Communications with Audit Committees, as adopted by the
PCAOB, and Rule 2-07, Communication with Audit Committees, of Regulation S-X. The Audit
Committee has concluded that KPMG’s provision of audit and non-audit services to us and our
affiliates is compatible with KPMG’s independence.
At each regularly scheduled meeting, the Audit Committee met and held discussions with
management, our internal auditors and KPMG. Prior to their issuance, the Audit Committee
reviewed and discussed our quarterly and annual consolidated financial statements (including the
presentation of non-GAAP financial information) and disclosures under “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” (including significant accounting
policies and judgments) with management, our internal auditors and KPMG. The Audit Committee
also reviewed our policies and practices with respect to financial risk assessment, as well as
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