Office Depot 2003 Annual Report Download - page 84

Office Depot 2003 / Proxy Statement 82
Audit Committee Report
The following Report of the Audit Committee does not consti-
tute soliciting material and should not be deemed filed or
incorporated by reference into any other Company filing
under the Securities Act of 1933 or the Securities Exchange
Act of 1934, except to the extent the Company specifically
incorporates this Report by reference therein.
The Audit Committee of the Office Depot Board of Directors
(the “ Committee”) is comprised of four independent directors.
The responsibilities of the Committee are set forth in its writ-
ten charter (the “ Charter”), which has been adopted by our
Board of Directors (the “ Board”). A copy of the Charter is
attached to this proxy statement as Appendix B and also may
be obtained from our Company in the manner described else-
where in this proxy statement.
The duties of this Committee include oversight of the finan-
cial reporting process for the Company through periodic
meetings with the Company’s independent accountants, inter-
nal auditors and management of the Company to review
accounting, auditing, internal controls and financial reporting
matters. Pursuant to the Sarbanes-Oxley Act of 2002 (“ SOA”),
our Committee has certain other duties, which include the
engagement of our independent accounting firm, Deloitte &
Touche LLP (“ Deloitte”), pre-approval of both audit and non-
audit work in advance of Deloitte’s commencing such work
and other obligations as imposed by SOA. Pursuant to appli-
cable provisions of SOA, we have delegated to our Chairman,
Michael Myers, the authority to pre-approve engagements of
Deloitte between meetings of our Committee, provided that
he reports to us at each meeting on pre-approvals since the
date of our last Committee meeting. Our Board has deter-
mined that Mr. Myers is an “ audit committee financial expert”
under the regulations of the SEC promulgated pursuant to
authority granted to it under SOA. Mr. Myers’ qualifications
are detailed in his biographical information set forth earlier in
this Proxy Statement. In addition, in accordance with listing
standards of the New York Stock Exchange (the “ Exchange”),
our Board has determined that each member of our Audit
Committee is financially literate as required by such listing
standards.
During fiscal year 2003, this Committee met seven times, four
times in person and three times by telephonic communication
prior to the release of quarterly earnings information (one
review of earnings information took place at a regular meeting
of the Committee). The Company’s senior financial manage-
ment and independent and internal auditors were in attend-
ance at all such meetings. At each such meeting held in
person, this Committee conducted a private session with the
management of our Internal Audit Department as well as the
external, independent accountants, without the presence of
management.
The management of the Company is responsible for the prepa-
ration and integrity of the financial reporting information and
related systems of internal controls. The Audit Committee, in
carrying out its role, relies on the Company’s senior manage-
ment, including particularly its senior financial management,
to prepare financial statements with integrity and objectivity
and in accordance with generally accepted accounting princi-
ples, and relies upon the Company’s independent accountants
to review or audit, as applicable, such financial statements in
accordance with generally accepted auditing standards.
We have reviewed and discussed with senior management the
Company’s audited financial statements for the fiscal year
ended December 27, 2003, included in the Company’s 2003
Annual Report to Shareholders. Management has confirmed
to us that such financial statements (i) have been prepared
with integrity and objectivity and are the responsibility of
management and (ii) have been prepared in conformity with
generally accepted accounting principles.
In discharging our oversight responsibility as to the audit
process, we have discussed with Deloitte, the Company’s
independent accountants, the matters required to be discussed
by SAS 61 (Communications with Audit Committees). SAS 61
requires our independent accountants to provide us with addi-
tional information regarding the scope and results of their audit
of the Company’s financial statements, including: (i) their
responsibilities under generally accepted auditing standards,
(ii) significant accounting policies, (iii) management judg-
ments and estimates, (iv) any significant accounting adjust-
ments, (v) any disagreements with management and (vi) any
difficulties encountered in performing the audit.
We have obtained from Deloitte a letter providing the disclo-
sures required by Independence Standards Board Standard
No. 1 (Independence Discussion with Audit Committees) with
respect to any relationship between Deloitte and the Company
that in their professional judgment may reasonably be thought
to bear on independence. Deloitte has discussed its independ-
ence with us, and has confirmed in its letter to us that, in its pro-
fessional judgment, it is independent of the Company within
the meaning of the United States securities laws.
Based upon the foregoing review and discussions with our
independent and internal auditors and senior management of
the Company, we have recommended to our Board that the
financial statements prepared by the Company’s management
and audited by its independent accountants be included in the
Company’s 2003 Annual Report to Shareholders, and that
such financial statements also be included in the Company’s
Annual Report on Form 10-K, for filing with the United
States Securities & Exchange Commission. The Committee
also has appointed Deloitte as the Company’s independent
accounting firm for 2004.
As specified in the Charter, it is not the duty of this Commit-
tee to plan or conduct audits or to determine that the Company’s
financial statements are complete and accurate and in accord-
ance with generally accepted accounting principles. These
are the responsibilities of the Company’s management and