Baker Hughes 2007 Annual Report Download - page 58

40 Baker Hughes Incorporated
recommended to the Board of Directors, and the Board has
approved, that the financial statements be included in the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2007.
James F. McCall (Chairman)
Larry D. Brady
Clarence P. Cazalot, Jr.
Anthony G. Fernandes
James A. Lash
J. Larry Nichols
PROPOSAL NO. 2
RATIFICATION OF THE COMPANY’S INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit/Ethics Committee has selected the firm of
Deloitte & Touche LLP as our Independent Registered Public
Accounting Firm to audit the Company’s books and accounts
for the year ending December 31, 2008. Deloitte & Touche
served as our Independent Registered Public Accounting Firm
for fiscal year 2007. While the Audit/Ethics Committee is
responsible for the appointment, compensation, retention,
termination and oversight of the Independent Registered
Public Accounting Firm, we are requesting, as a matter of
good corporate governance, that the stockholders ratify the
appointment of Deloitte & Touche as our principal Indepen-
dent Registered Public Accounting Firm. If the stockholders fail
to ratify the selection, the Audit/Ethics Committee will recon-
sider whether to retain Deloitte & Touche and may retain that
firm or another without re-submitting the matter to our stock-
holders. Even if the appointment is ratified, the Audit/Ethics
Committee may, in its discretion, direct the appointment of a
different Independent Registered Public Accounting Firm at
anytime during the year if it determines that such change
would be in the Company’s best interests and in the best inter-
ests of our stockholders.
Deloitte & Touche’s representatives will be present at the
Annual Meeting and will have an opportunity to make a state-
ment, if they so desire, as well as to respond to appropriate
questions asked by our stockholders.
Recommendation of the Board of Directors
Your Board of Directors recommends a vote “FOR”
ratification of the selection of Deloitte & Touche LLP
as the Company’s Independent Registered Public
Accounting Firm for 2008.
FEES PAID TO DELOITTE & TOUCHE LLP
Deloitte & Touche LLP, the member firms of Deloitte
Touche Tohmatsu and their respective affiliates (collectively,
“Deloitte Entities”) billed or will bill the Company or its subsid-
iaries for the aggregate fees set forth in the table below for
services provided during 2007 and 2006. These amounts
include fees paid or to be paid by the Company for (i) profes-
sional services rendered for the audit of the Company’s annual
financial statements and review of quarterly financial state-
ments, audit services related to Management’s Report on Inter-
nal Control over Financial Reporting and audit services related
to the effectiveness of the Company’s internal control over
financial reporting, (ii) assurance and related services that are
reasonably related to the performance of the audit or review of
the Company’s financial statements and (iii) professional services
rendered for tax compliance, tax advice, and tax planning.
2007 2006
(in millions) (in millions)
Audit fees $ 10.2 $ 10.6
Audit-related fees $ 0.1 $ 0
Tax fees $ 1.2 $ 1.0
Total $ 11.5 $ 11.6
Audit fees include fees related to the audit of the Compa-
ny’s annual financial statements, review of quarterly financial
statements, audit of Management’s Report on Internal Con-
trols as required by Section 404 of SOX and audit services
related to the effectiveness of the Company’s internal control
over financial reporting.
Tax fees are primarily for the preparation of income, pay-
roll, value added and various other miscellaneous tax returns
in 28 of the more than 90 countries where the Company
operates. The Company also incurs local country tax advisory
services in these countries. Examples of these kinds of services
are assistance with audits by the local country tax authorities,
acquisition and disposition advice, consultation regarding
changes in legislation or rulings and advice on the tax effect
of other structuring and operational matters.
In addition to the above services and fees, Deloitte Entities
provide audit and other services to various Company spon-
sored employee benefit plans which fees are incurred by and
paid by the respective plans. Fees paid to Deloitte Entities for
these services totaled approximately $0.3 million in 2007 and
$0.2 million in 2006.
Pre-Approval Policies and Procedures
The Audit/Ethics Committee has adopted guidelines for
the pre-approval of audit and permitted non-audit services by
the Company’s Independent Registered Public Accounting
Firm. The Audit/Ethics Committee will consider annually and, if
appropriate, approve the provision of audit services by its Inde-
pendent Registered Public Accounting Firm and consider and,
if appropriate, pre-approve the provision of certain defined
audit and non-audit services. The Audit/Ethics Committee will
also consider on a case-by-case basis and, if appropriate,
approve specific engagements that are not otherwise pre-ap-
proved. Any proposed engagement with estimated non-audit
fees of $15,000 or more that does not fit within the definition
of a pre-approved service are presented to the Chairman of
the Audit/Ethics Committee for pre-approval. The Chairman of
the Audit/Ethics Committee will report any specific approval of
services at its next regular meeting. The Audit/Ethics Commit-
tee will review a summary report detailing all services being
provided to the Company by its Independent Registered Public
Accounting Firm. All of the fees and services described above
under “audit fees,” “audit-related fees” and “tax fees” were
approved under the Guidelines for Pre-Approval of Audit and
Non-Audit Fees of the Independent Registered Public Account-
ing Firm and pursuant to Section 202 of SOX.