Kroger 2014 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2014 Kroger annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

54
AU D I T C O M M I T T E E R E P O R T
The฀primary฀function฀of฀the฀Audit฀Committee฀is฀to฀represent฀and฀assist฀the฀Board฀of฀Directors฀in฀fulfilling฀
its฀oversight฀responsibilities฀regarding฀the฀Company’s฀financial฀reporting฀and฀accounting฀practices฀including฀
the฀ integrity฀ of฀ the฀ Company’s฀ financial฀ statements;฀ the฀ Company’s฀ compliance฀ with฀ legal฀ and฀ regulatory฀
requirements;฀the฀independent฀public฀accountants’฀qualifications฀and฀independence;฀the฀performance฀of฀the฀
Company’s฀internal฀audit฀function฀and฀independent฀public฀accountants;฀and฀the฀preparation฀of฀this฀report฀
that฀SEC฀rules฀require฀be฀included฀in฀the฀Company’s฀annual฀proxy฀statement.฀The฀Audit฀Committee฀performs฀
this฀work฀pursuant฀to฀a฀written฀charter฀approved฀by฀the฀Board฀of฀Directors.฀The฀Audit฀Committee฀charter฀
most฀recently฀was฀revised฀during฀fiscal฀2012฀and฀is฀available฀on฀the฀Company’s฀website฀at฀ir.kroger.com.฀The฀
Audit฀Committee฀has฀implemented฀procedures฀to฀assist฀it฀during฀the฀course฀of฀each฀fiscal฀year฀in฀devoting฀the฀
attention฀that฀is฀necessary฀and฀appropriate฀to฀each฀of฀the฀matters฀assigned฀to฀it฀under฀the฀Committee’s฀charter.฀
The฀ Audit฀ Committee฀ held฀ five฀ meetings฀ during฀ fiscal฀ year฀ 2014.฀ The฀ Audit฀ Committee฀ meets฀ separately฀
with฀the฀Company’s฀internal฀auditor฀and฀PricewaterhouseCoopers฀LLP,฀the฀Company’s฀independent฀public฀
accountants, without management present, to discuss the results of their audits, their evaluations of the
Company’s฀ internal฀ controls฀ over฀ financial฀ reporting,฀ and฀ the฀ overall฀ quality฀ of฀ the฀ Company’s฀ financial฀
reporting.฀The฀Audit฀Committee฀also฀meets฀separately฀with฀the฀Company’s฀Chief฀Financial฀Officer฀and฀General฀
Counsel฀when฀needed.฀Following฀these฀separate฀discussions,฀the฀Audit฀Committee฀meets฀in฀executive฀session.
Management฀ of฀ the฀ Company฀ is฀ responsible฀ for฀ the฀ preparation฀ and฀ presentation฀ of฀ the฀ Company’s฀
financial฀ statements,฀ the฀ Company’s฀ accounting฀ and฀ financial฀ reporting฀ principles฀ and฀ internal฀ controls,฀
and฀ procedures฀ that฀ are฀ designed฀ to฀ provide฀ reasonable฀ assurance฀ regarding฀ compliance฀ with฀ accounting฀
standards฀ and฀ applicable฀ laws฀ and฀ regulations.฀ The฀ independent฀ public฀ accountants฀ are฀ responsible฀ for฀
auditing฀the฀Company’s฀financial฀statements฀and฀expressing฀opinions฀as฀to฀the฀financial฀statements’฀conformity฀
with฀generally฀accepted฀accounting฀principles฀and฀the฀effectiveness฀of฀the฀Company’s฀internal฀control฀over฀
financial reporting.
In฀ the฀ performance฀ of฀ its฀ oversight฀ function,฀ the฀ Audit฀ Committee฀ has฀ reviewed฀ and฀ discussed฀
with฀ management฀ and฀ PricewaterhouseCoopers฀ LLP฀ the฀ audited฀ financial฀ statements฀ for฀ the฀ year฀ ended฀
January฀ 31,฀ 2015,฀ management’s฀ assessment฀ of฀ the฀ effectiveness฀ of฀ the฀ Company’s฀ internal฀ control฀ over฀
financial฀reporting฀as฀of฀January฀31,฀2015,฀and฀PricewaterhouseCoopers฀LLP’s฀evaluation฀of฀the฀Company’s฀
internal฀control฀over฀financial฀reporting฀as฀of฀that฀date.฀The฀Audit฀Committee฀has฀also฀discussed฀with฀the฀
independent฀public฀accountants฀the฀matters฀that฀the฀independent฀public฀accountants฀must฀communicate฀to฀
the฀Audit฀Committee฀under฀applicable฀requirements฀of฀the฀Public฀Company฀Accounting฀Oversight฀Board.
With฀ respect฀ to฀ the฀ Company’s฀ independent฀ public฀ accountants,฀ the฀ Audit฀ Committee,฀ among฀ other฀
things,฀discussed฀with฀PricewaterhouseCoopers฀LLP฀matters฀relating฀to฀its฀independence฀and฀has฀received฀
the฀ written฀ disclosures฀ and฀ the฀ letter฀ from฀ the฀ independent฀ public฀ accountants฀ required฀ by฀ applicable฀
requirements฀ of฀ the฀ Public฀ Company฀ Accounting฀ Oversight฀ Board฀ regarding฀ the฀ independent฀ public฀
accountants’฀communications฀ with฀the฀Audit฀Committee฀concerning฀independence.฀The฀Audit฀Committee฀
has฀reviewed฀and฀approved฀in฀advance฀all฀services฀provided฀to฀the฀Company฀by฀PricewaterhouseCoopers฀LLP.
The฀Audit฀Committee฀annually฀reviews฀PricewaterhouseCoopers฀LLP’s฀independence฀and฀performance฀
in฀connection฀with฀the฀Audit฀Committee’s฀responsibility฀for฀the฀appointment฀and฀oversight฀of฀the฀Company’s฀
independent฀public฀accountants.฀The฀Audit฀Committee฀considers,฀among฀other฀things,฀PricewaterhouseCoopers฀
LLP’s฀ historical฀ and฀ recent฀ performance฀ on฀ the฀ Company’s฀ audit,฀ including฀ an฀ internal฀ survey฀ of฀ their฀
service฀quality฀by฀members฀of฀management฀and฀the฀Audit฀Committee.฀The฀Audit฀Committee฀reviews฀recent฀
Public฀ Company฀ Accounting฀ Oversight฀ Board฀ reports฀ on฀ PricewaterhouseCoopers฀ LLP฀ and฀ its฀ peer฀ firms,฀
and฀ considers฀ PricewaterhouseCoopers฀ LLP’s฀ tenure฀ as฀ the฀ Company’s฀ independent฀ public฀ accountants฀
and฀their฀familiarity฀with฀our฀operations,฀businesses,฀accounting฀policies฀and฀practices฀and฀internal฀control฀
over฀financial฀reporting.฀Further,฀in฀conjunction฀with฀the฀mandated฀rotation฀of฀the฀public฀accountants’฀lead฀
engagement฀partner,฀the฀Audit฀Committee฀is฀directly฀involved฀in฀the฀selection฀of฀PricewaterhouseCoopers฀
LLP’s฀lead฀engagement฀partner฀every฀five฀years.฀The฀Audit฀Committee฀believes฀that฀the฀continued฀retention฀
of฀ PricewaterhouseCoopers฀ LLP฀ to฀ serve฀ as฀ the฀ Company’s฀ independent฀ public฀ accountants฀ is฀ in฀ the฀ best฀
interests฀of฀the฀Company฀and฀its฀shareholders.