Pier 1 2013 Annual Report Download - page 107

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Pre-approval of Nonaudit Fees
The audit committee has adopted a policy that requires advance approval of all audit, audit related, tax and
other services performed by the independent registered public accounting firm. The policy provides for pre-approval
by the audit committee of specifically defined audit, audit related and tax services. Unless the specific service has
been previously pre-approved with respect to a fiscal year, the audit committee must approve the permitted service
before the independent registered public accounting firm is engaged to perform it. The audit committee has
delegated to the chairman of the audit committee, or any of its other members, authority to approve permitted
services up to $50,000 per engagement provided that any pre-approval decisions are reported to the committee at its
next scheduled meeting.
AUDIT COMMITTEE REPORT
Each member of the audit committee is an independent director, pursuant to the independence requirements of
the SEC and NYSE. In accordance with the committee’s written charter, the committee assists the board of directors
in overseeing the quality and integrity of Pier 1 Imports’ accounting, auditing and financial reporting practices. In
performing its oversight function, the committee reviewed and discussed Pier 1 Imports’ audited consolidated
financial statements as of and for the fiscal year ended March 2, 2013, with management and Pier 1 Imports’
independent registered public accounting firm, including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial
statements. The committee also discussed with Pier 1 Imports’ independent registered public accounting firm all
matters required by generally accepted auditing standards, including those described in Statement on Auditing
Standards No. 61, “Communication with Audit Committees” and, with and without management present, discussed
and reviewed the results of the independent registered public accounting firm’s examination of the consolidated
financial statements.
The committee obtained from the independent registered public accounting firm a formal written statement
describing all relationships between the firm and Pier 1 Imports that might affect the firm’s independence consistent
with applicable requirements of the Public Company Accounting Oversight Board regarding the independent
accountant’s communications with the audit committee concerning independence. The committee also discussed
with the registered public accounting firm any relationships that may have an impact on its objectivity and
independence and satisfied ourselves that the registered public accounting firm is independent. The committee also
considered whether the provision of non-audit services by Ernst & Young LLP, Pier 1 Imports’ independent
registered public accounting firm for fiscal 2013, to Pier 1 Imports is compatible with maintaining Ernst & Young
LLP’s independence.
Based on the above-described review and discussions with management and the independent registered public
accounting firm, the committee recommended to the board of directors that Pier 1 Imports’ audited consolidated
financial statements be included in Pier 1 Imports’ Annual Report on Form 10-K for the fiscal year ended March 2,
2013, for filing with the SEC.
AUDIT COMMITTEE
Cece Smith, Chair
Claire H. Babrowski
Hamish A. Dodds
25