Eli Lilly 2013 Annual Report Download - page 148

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50
The committee has also appointed the company’s independent auditor, subject to shareholder ratification, for
2014.
Audit Committee
Michael L. Eskew, Chair
Katherine Baicker, Ph.D.
Douglas R. Oberhelman
Kathi P. Seifert
Jackson P. Tai
Services Performed by the Independent Auditor
The Audit Committee preapproves all services performed by the independent auditor, in part to assess
whether the provision of such services might impair the auditor’s independence. The committee’s policy and
procedures are as follows:
• The committee approves the annual audit services engagement and, if necessary, any changes in terms,
conditions, and fees resulting from changes in audit scope, company structure, or other matters. Audit
services include internal controls attestation work under Section 404 of the Sarbanes-Oxley Act. The
committee may also preapprove other audit services, which are those services that only the independent
auditor reasonably can provide.
• Audit-related services are assurance and related services that are reasonably related to the performance
of the audit, and that are traditionally performed by the independent auditor. The committee believes that
the provision of these services does not impair the independence of the auditor.
• The committee believes that, in appropriate cases, the independent auditor can provide tax compliance
services, tax planning, and tax advice without impairing the auditor’s independence.
• The committee may approve other services to be provided by the independent auditor if (i) the services
are permissible under SEC and PCAOB rules, (ii) the committee believes the provision of the services
would not impair the independence of the auditor, and (iii) management believes that the auditor is the
best choice to provide the services.
• At the beginning of each audit year, management requests prior committee approval of the annual audit,
statutory audits, and quarterly reviews for the upcoming audit year as well as any other engagements
known at that time. Management will also present at that time an estimate of all fees for the upcoming
audit year. As specific engagements are identified thereafter, they are brought forward to the committee
for approval. To the extent approvals are required between regularly scheduled committee meetings,
preapproval authority is delegated to the committee chair.
For each engagement, management provides the committee with information about the services and fees,
sufficiently detailed to allow the committee to make an informed judgment about the nature and scope of the
services and the potential for the services to impair the independence of the auditor.
After the end of the audit year, management provides the committee with a summary of the actual fees
incurred for the completed audit year.
Independent Auditor Fees
The following table shows the fees incurred for services rendered on a worldwide basis by the company’s
independent auditor, EY in 2013 and 2012. All such services were pre-approved by the committee in
accordance with the pre-approval policy.