Staples 2004 Annual Report Download - page 41

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The Audit Committee provides independent, objective oversight of the Company’s financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for the preparation of the Company’s
financial statements and for maintaining an adequate system of disclosure controls and procedures and internal
control over financial reporting for that. In fulfilling its oversight responsibilities, the Audit Committee reviewed and
discussed the audited financial statements for the fiscal year ended January 29, 2005, with management, which review
included 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 Audit Committee reviewed and discussed with Ernst & Young LLP, the Company’s independent registered
public accounting firm, which is responsible for expressing an opinion on the conformity of those audited financial
statements with generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of
the Company’s accounting principles and such other matters as are required to be discussed with the Audit
Committee under generally accepted auditing standards, including Statement on Auditing Standards 61
(Communication with Audit Committees). The independent registered public accounting firm also provided the Audit
Committee with the written disclosures and the letter required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees). The Audit Committee discussed with the independent registered
public accounting firm the independent registered public accounting firm’s independence from management and the
Company, including the matters in the written disclosures required by the Independence Standards Board, and
considered the compatibility of non-audit related services provided to the Company by Ernst & Young LLP with the
independent registered public accounting firm’s independence.
The Audit Committee discussed with the Company’s internal auditors and independent registered public
accounting firm the overall scope and plans for their respective audits. The Audit Committee meets with the internal
auditors and independent registered public accounting firm, with and without management present, to discuss the
results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the
Company’s financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the
Company’s Board of Directors, and the Board approved, that the Company’s audited financial statements be included
in the Annual Report on Form 10-K for the year ended January 29, 2005 for filing with the SEC.
Audit Committee:
Paul F. Walsh, Chairman
Mary Elizabeth Burton
Gary Crittenden
Independent Registered Public Accounting Firm’s Fees
In the interest of ensuring our independent registered public accounting firm’s independence, we consider it
important to maintain a low ratio of our non-audit fees to our audit fees. Accordingly, we reduced this ratio to
approximately 0.90:1 in fiscal year 2004 from approximately 2.93:1 in fiscal year 2003.
Audit Fees
Ernst & Young LLP billed Staples an aggregate of approximately $3.0 million and $1.9 million in fiscal years 2004
and 2003, respectively, for professional services rendered in connection with the Company’s annual audit, the audit of
our internal controls over financial reporting, statutory filings and registration statements. The cost of complying with
Section 404 of the Sarbanes-Oxley Act of 2002 contributed significantly to the increase in audit fees in fiscal year 2004.
Audit-Related Fees
Ernst & Young LLP billed Staples an aggregate of approximately $211,000 and $61,000 in fiscal years 2004 and
2003, respectively, for services related to assistance with internal control reporting, acquisition due diligence,
employee benefit plan audits, accounting consultation and compliance with regulatory requirements.
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