American Home Shield 2008 Annual Report Download - page 131

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former advisory partner attended meetings of ServiceMaster's former audit committee, but his primary role was to function in a client relationship role,
including conducting Deloitte's annual client service assessments. He did not participate in the review of any substantive audit matters with the former audit
committee at these meetings. In addition, while the former advisory partner attended a few annual meetings of stockholders, neither management nor Deloitte
recalled him participating at those meetings. Deloitte provided a draft letter on October 15, 2008 to the Audit Committee concluding that the actions of its
former advisory partner did not impair Deloitte's past or continuing independence.
The Audit Committee also conducted its own review with the assistance of external counsel engaged specifically for this purpose. The Audit Committee,
its external counsel and ServiceMaster held frequent meetings with Deloitte. The Audit Committee held meetings concerning the progress of its review on
October 16 and 21, 2008. The review included an examination of ServiceMaster's relationship with the former advisory partner and his role on
ServiceMaster's engagement during the Service Period. Over the course of the review, the external counsel and ServiceMaster examined a substantial number
of documents and communications from ServiceMaster's and Deloitte's files, including the former advisory partner's annual goals and assessments, his
communications with the audit engagement team and with ServiceMaster's management and members of the former audit committee, his independence
certifications, and emails and other documents relating to ServiceMaster's audit engagement. The review concluded that during the Service Period the former
advisory partner had functioned in a client relationship role and had not been involved in the audit or influenced any substantive portion of any audit or review
of ServiceMaster's financial statements.
The Audit Committee or external counsel also met with ServiceMaster's financial management team and with senior management of Deloitte, including
the current and former lead client service partners. The Audit Committee's review confirmed Deloitte's findings that the former advisory partner met with
ServiceMaster's former audit committee, as well as senior ServiceMaster management, for the purpose of enhancing Deloitte's client service to ServiceMaster
rather than participating in the audit or review of ServiceMaster's financial statements during the Service Period.
Therefore, the Audit Committee concurred in Deloitte's conclusion, reconfirmed in a report to the Audit Committee issued October 21, 2008, that
Deloitte's impartiality and objectivity related to its audits of ServiceMaster's financial statements had not been compromised and thus, notwithstanding the
violation of the SEC's independence rules, during the Service Period Deloitte's independence was not impaired. In reaching this conclusion, the Audit
Committee took into consideration several factors, including the following:
the former advisory partner is no longer a partner or otherwise affiliated with Deloitte;
the former advisory partner did not disclose his investments to Deloitte, in contravention of Deloitte's independence policies;
the former advisory partner's role on the audit engagement was limited and did not involve participation in the scoping or execution of Deloitte's
audit of ServiceMaster's annual financial statements, Deloitte's review of quarterly financial statements or technical consultations with Deloitte's
national office regarding ServiceMaster matters;
Deloitte's conclusion that the former advisory partner performed his role as advisory partner in a manner that could not have influenced the audit
engagement partners or any other members of the audit engagement team responsible for the audit in a manner that would impact the engagement
team's objectivity or impartiality;
the review conducted by ServiceMaster and external counsel indicated that the nature and extent of interaction between the former advisory
partner and members of management and employees of ServiceMaster and the members of the former audit committee was limited to matters
related to the relationship between Deloitte and ServiceMaster and did not include
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