Circuit City 2008 Annual Report Download - page 71

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6.
Review and discuss with management policies with respect to risk assessment and risk management. While it is the job of the
chief executive officer and senior management to assess and manage the Company’s exposure to risk, the Committee shall
discuss guidelines and policies to govern the process by which this is handled. The Committee shall discuss the Company’s
major financial risk exposures and the steps management has taken to monitor and control such exposures;
7.
Periodically meet separately with management, with internal auditors (or other personnel responsible for the internal audit
function), and with independent auditors;
8.
Annually discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No.
61 relating to the conduct of the audit, including any difficulties encountered in the course of the audit work, any restrictions
on the scope of activities or access to requested information, and any significant disagreements with management. The
discussion shall address, to the extent applicable, any accounting adjustments that were noted or proposed by the independent
auditor but were “passed” (as immaterial or otherwise), any communications between the audit team and the auditor’s national
office with respect to auditing or accounting issues presented by the engagement and any “management” or “internal control”
letter issued, or proposed to be issued, by the independent auditor. The Committee shall discuss with the independent auditor:
(a)
the responsibilities, budget and staffing of the Company’s internal audit function;
(b)
the Company’s critical accounting policies and practices;
(c)
alternative treatments of financial information within generally accepted accounting principles related to material
items the independent auditors have discussed with management, ramifications of use of the alternative disclosures
and treatments, and the treatment preferred by the independent auditors; and
(d)
other material written communications between the independent auditor and management, such as any management
letter or schedule of unadjusted differences.
The Company’s directors of internal audit shall report directly to the chief financial officer and the Committee at least four
times per fiscal year, or more often as necessary;
9.
The Committee shall periodically review and discuss with management and the independent auditor: (a) any major issues
regarding accounting principles and financial statement presentations, including any significant changes in the
3