CenturyLink 2015 Annual Report Download - page 30

independence in providing audit and audit-related services. The Committee’s procedures prohibit the
independent auditor from providing any non-audit services unless the service is permitted under applicable law
and is pre-approved by the Audit Committee or its Chairman. The Chairman is authorized to pre-approve projects
expected to cost no more than $100,000, provided the total cost of all projects pre-approved by the Chairman
during any fiscal quarter does not exceed $150,000. The Audit Committee has pre-approved the Company’s
independent auditor to provide up to $75,000 per quarter of miscellaneous permitted tax services that do not
constitute discrete and separate projects. The Chairman and the Chief Financial Officer are required periodically
to advise the full Committee of the scope and cost of services not pre-approved by the full Committee. Although
applicable regulations waive these pre-approval requirements in certain limited circumstances, the Audit
Committee did not use these waiver provisions in either 2014 or 2015.
KPMG has advised us that one or more of its partners will be present at the meeting. We understand that
these representatives will be available to respond to appropriate questions and will have an opportunity to make a
statement if they desire to do so.
Ratification of KPMG’s appointment as our independent auditor for 2016 will require the affirmative vote
of the holders of at least a majority of the votes cast on the proposal at the meeting.
The Board unanimously recommends a vote FOR this proposal.
AUDIT COMMITTEE REPORT
Management is responsible for our internal controls and financial reporting process. Our independent
auditor is responsible for performing an independent audit of our consolidated financial statements and the
effectiveness of our internal control over financial reporting, and to issue reports thereon. As more fully
described in its charter, the Audit Committee is responsible for assisting the Board in its general oversight of
these processes and for appointing and overseeing the independent auditor, including reviewing their
qualifications, independence and performance.
In this context, the Committee has met and held discussions with management and our internal auditors and
independent auditor for 2015, KPMG LLP. Management represented to the Committee that our consolidated
financial statements were prepared in accordance with generally accepted U.S. accounting principles. The
Committee has reviewed and discussed with management and KPMG the consolidated financial statements, and
management’s report and KPMG’s report and attestation on internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002. The Committee also discussed with KPMG
matters required to be discussed by Auditing Standard No. 16, Communications with Audit Committees.
Among other matters, over the course of the past year, the Committee also:
• reviewed the scope of and overall plans for the annual audit and the internal audit program, including a
review of critical accounting policies, critical accounting estimates, and significant unusual
transactions;
• reviewed a report by the independent auditor describing the independent auditor’s internal quality
control procedures;
• reviewed the performance of the lead engagement partner of our independent auditor;
• reviewed and discussed each quarterly and annual earnings press release before issuance;
• received periodic reports from the director of internal audit, and met with other members of the internal
audit staff;
• received periodic reports pursuant to our policy for the submission and confidential treatment of
communications from employees and others about accounting, internal controls and auditing matters;
19