Freddie Mac 2015 Annual Report Download - page 389

Principal Accounting Fees and Services
Freddie Mac 2015 Form 10-K 387
one or more members of the Audit Committee to pre-approve such services and report such pre-approval
to the Audit Committee).
Audit services that are within the scope of an auditor’s engagement approved by the Audit Committee
prior to the performance of those services are deemed pre-approved and do not require separate pre-
approval. Audit services not within the scope of an Audit Committee-approved engagement, as well as
permissible non-audit services, must be separately pre-approved by the Audit Committee.
When the Audit Committee pre-approves a service, it typically sets a dollar limit for such service.
Management endeavors to obtain pre-approval of the Audit Committee, or of the Chair of the Audit
Committee (when the Chair of the Audit Committee has been delegated such authority), before it incurs
fees exceeding the dollar limit. If the Chair of the Audit Committee approves the increase, the Chair will
report such approval at the Audit Committee’s next scheduled meeting. The Audit Committee has
delegated to the Chair the authority to address requests to pre-approve certain additional audit and non-
audit services to be performed by the company’s independent auditor with fees up to a maximum of
$250,000 per quarter, with reporting of any such approval decisions to the Audit Committee at its next
scheduled meeting.
The pre-approval procedure is administered by our senior financial management, which reports
throughout the year to the Audit Committee. The Audit Committee pre-approved all audit, audit-related,
tax, and other services performed in 2015 and 2014.
The Audit Committee appoints the independent public accounting firm on an annual basis. In evaluating
the performance of the independent public accounting firm, the Audit Committee considers a number of
factors, including the following:
• The firm’s status as a registered public accounting firm with the Public Company Accounting
Oversight Board (United States) (“PCAOB”) as required by the Sarbanes-Oxley Act of 2002 and the
Rules of the PCAOB;
• Its independence and processes for maintaining its independence;
• Its approach to resolving significant accounting and auditing matters;
• Its capability and expertise in handling the complexity of the company’s business, including the
expertise and capability of the lead audit partner and of the key members of the engagement team;
• Historical and recent performance, including the extent and quality of the independent public
accounting firm’s communications with the Audit Committee, and the results of a management survey
of the independent public accounting firm’s overall performance;
• Data related to audit quality and performance, including recent PCAOB inspection reports on the firm;
and
• The appropriateness of its fees, both on an absolute basis and as compared with peers.
The Audit Committee has determined that the non-audit services rendered by PricewaterhouseCoopers
during its most recent fiscal year are compatible with maintaining PricewaterhouseCoopers’
independence.