HR Block 2006 Annual Report Download - page 64

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Department in connection with the preparation of the 쐍Obtain from the independent auditor assurance that
financial statements. Section 10A(b) of the Exchange Act has not been implicated.
쐍Discuss with management and the independent auditor the 쐍Review disclosures made to the Audit Committee by the
matters required to be discussed by Statement on Auditing Company’s CEO and CFO during their certification process
Standards No. 61 relating to the audit, including any for the Form 10-K and Form 10-Q about any significant
difficulties encountered in the course of the audit work, any deficiencies in the design or operation of internal controls or
restrictions on the scope of activities or access to requested material weaknesses therein and any fraud involving
information, and any significant disagreements management or other employees who have a significant role
with management. in the Company’s internal controls.
쐍Review and discuss reports from the independent auditors
on (a) all critical accounting policies and practices to be ETHICAL AND LEGAL COMPLIANCE AND
used, (b) all alternative treatments of financial information OTHER RESPONSIBILITIES
within generally accepted accounting principles that have The Audit Committee shall:
been discussed with management, ramifications of the use of 쐍Establish, review and update (or cause management to
such alternative disclosures and treatments, and the update) periodically the H&R Block, Inc. Code of Ethics &
treatment preferred by the independent auditor, and Conduct (the ‘‘Code’’) and assure that management has
(c) other material written communications between the established a system to enforce the Code.
independent auditor and management, such as any 쐍Review and approve the appointment, replacement,
management letter or schedule of unadjusted differences. reassignment or dismissal of the Ethics Program Director
쐍Discuss with the independent auditor and management under the Code and periodically review his or
(a) the significant financial reporting issues and judgments her performance.
made in connection with the preparation of the Company’s 쐍Review reports concerning compliance of the Company’s
financial statements, including any significant changes in the directors, management, associates and others to whom the
Company’s selection or application of accounting principles Code applies.
and (b) the effect of regulatory and accounting initiatives as 쐍Review the results of the Internal Audit Department’s annual
well as off-balance sheet structures on the Company’s audit of corporate officer expenses and perquisites.
financial statements. 쐍Review with the Company’s General Counsel and, when
쐍Make recommendations to the Board of Directors as to appropriate, outside counsel legal compliance matters and
whether the audited financial statements should be included any legal matter that could have a significant impact on the
in the Company’s Annual Report on Form 10-K for the last Company’s financial statements.
fiscal year for the filing with the Commission. 쐍Conduct or authorize investigations into any matters within
쐍Receive from management and the independent auditor the scope of the Committee’s responsibilities.
timely analysis of significant current financial 쐍As appropriate, obtain advice and assistance from outside
reporting issues. legal, accounting or other advisors, with the Company
쐍Review with management, the Internal Audit Department providing for appropriate funding, as determined by the
and the independent auditor the Company’s major financial Audit Committee, for payment of compensation to
risk exposures and the steps management has taken to such advisors.
monitor and control such exposures (including the 쐍Establish procedures for the receipt, retention and treatment
Company’s risk assessment and risk management policies), of complaints received by the Company regarding
any major issues as to the adequacy of the Company’s accounting, internal accounting controls or auditing matters,
internal controls, and any special audit steps adopted in light and the confidential, anonymous submission by employees
of any material control deficiencies. of concerns regarding questionable accounting or
쐍Discuss with management the Company’s earnings press auditing matters.
releases, including the use of ‘‘pro forma’’ or other ‘‘non- 쐍Annually evaluate its own performance.
GAAP financial measures,’’ as well as financial information
and earnings guidance provided to analysts and
rating agencies.
H&R BLOCK 2006 Proxy Statement
B-3