Alaska Airlines and Horizon Air 2007 Annual Report Download - page 48

Independent Auditor Engagement Policy
The Audit Committee has established an
Independent Auditor Engagement Policy that is
designed to ensure that the Company’s auditor
performs its services independently and with the
highest integrity and professionalism. The Audit
Committee reviews the policy annually.
The policy provides that any engagement of
the Company’s outside auditor must be
consistent with principles determined by the
SEC, namely, whether the independent auditor is
capable of exercising impartial judgment on all
issues encompassed within the auditor’s
engagement.
Permitted services under the policy include
audit services, audit-related services, certain tax
services and certain other services not
prohibited by SEC rules or other federal
regulations. Before retaining its independent
auditor for non-audit services, the Audit
Committee will consider factors such as whether
the services might compromise the auditor’s
independence, whether the auditor is the best
provider for the services, and the appropriate
proportion of audit to non-audit services.
All services must be pre-approved by the
Audit Committee except for certain services
other than audit, review or attest services that
meet the “de minimis exception” under 17 CFR
Section 210.2-01, namely:
• the aggregate amount of fees paid for
all such services is not more than five
percent (5%) of the total fees paid by
the Company to its auditor during the
fiscal year in which the services are
provided;
• such services were not recognized by
the Company at the time of the
engagement to be non-audit services;
and
• such services are promptly brought to
the attention of the Audit Committee
and approved prior to the completion of
the audit.
During fiscal years 2007 and 2006, there
were no such services that were performed
pursuant to the “de minimis exception.”
AUDIT COMMITTEE REPORT
The following report of the Audit Committee
shall not be deemed to be soliciting material or
to be filed with the SEC under the Securities Act
of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, or
incorporated by reference in any document so
filed.
Review of Our Company’s Audited Financial
Statements
The Audit Committee has reviewed and
discussed with management and KPMG, the
Company’s independent auditors, the Company’s
audited financial statements included in the
Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2007. We
believe that management maintains an effective
system of internal controls that results in fairly
presented financial statements.
The discussions with KPMG also included
the material and judgmental matters required by
Statement on Auditing Standards No. 114, The
Auditor’s Communication with Those Charged
with Governance, as amended, by the Auditing
Standards Board of the American Institute of
Certified Public Accountants.
We have also received and reviewed the
written disclosures and the KPMG letter required
by Independence Standard No. 1, Independence
Discussions with Audit Committees by the
Independence Standards Board, and we have
discussed with KPMG their independence.
Based on the review and discussions
described above, the Audit Committee
recommended to the Board of Directors that the
audited financial statements be included in
Alaska Air Group’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2007.
Audit Committee of the Board of Directors
Patricia M. Bedient, Chairperson
Mark R. Hamilton, Member
Dennis F. Madsen, Member
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