Travelzoo 2002 Annual Report Download - page 15

permissible under Sections 201 and 202 of the Act and the fee for such service. Consider any signiÑcant non-
audit assignments awarded to the independent auditors and determine whether or not these have any impact
on the independence of the independent auditors in the performance of the annual audit.
2. Annually evaluate the qualiÑcations, the quality control procedures and prior performance of the
Company's current independent auditors, which shall be ultimately accountable to the Board and this
Committee, as representatives of the shareholders. Based on the representations regarding independence and
the results of such evaluation, determine whether to recommend to the Board that the independent auditors be
reappointed or replaced and whether it is appropriate to adopt a policy of rotating on a regular basis; provided
that the independent auditors must be replaced if the lead audit partner, or the audit partner responsible for
reviewing the audit, has performed audit services for the Company in each of the Ñve (5) previous Ñscal years.
If a determination is made to recommend that the current independent auditors be replaced, recommend to
the Board such replacement.
3. Meet with the independent auditors and Ñnancial management of the Company in advance of the
annual audit to review its proposed scope, the proposed scope of the quarterly reviews, and the procedures to
be followed in conducting the audit and the reviews.
4. Review and approve the independent auditors' annual engagement letter, and the compensation of the
independent auditors.
5. Review with the independent auditors any matters required to be discussed by Statement of Auditing
Standards No. 61, as the same may be modiÑed or supplemented.
6. Review and discuss, prior to Ñling, the Company's Ñnancial statements proposed to be included in the
Company's Annual Report on Form 10-K with the Company's Ñnancial management and independent
auditors, including major issues regarding accounting and auditing principles and practices as well as the
adequacy of internal controls that could signiÑcantly aÅect the Company's Ñnancial statements. If deemed
appropriate after such review and discussion, recommend to the Board that the Ñnancial statements be
included in the Annual Report on Form 10-K.
7. Review and discuss, prior to issuance or Ñling, the Company's Ñnancial statements proposed to be
included in the Company's public earnings reports and the Company's Quarterly Reports on Form 10-Q with
the Company's Ñnancial management and independent auditors, including the results of the independent
auditors quarterly reviews. The Chair of the Committee may represent the entire Committee for purposes of
the Form 10-Q review.
8. Discuss at least annually with the Company's independent auditors the following: the adequacy and
eÅectiveness of the Company's internal Ñnancial controls; the management letter issued by the independent
auditors and management's response thereto; actions management has taken or progress it has made in
addressing issues raised by the independent auditors; any diÇculties encountered in the course of the audit
work, including any restrictions on the scope of activities or access to required information; any disagreements
with management; and major areas of Ñnancial risk.
9. Review with management and the independent auditors any comments or inquiries from the Securities
and Exchange Commission relating to the Company's Ñnancial statements or other Ñnancial matters included
in the Company's Ñlings with the Commission.
10. Obtain reports from management that the Company's subsidiary(ies) are in conformity with
applicable legal requirements, including disclosures of insider and aÇliated party transactions.
11. Review major changes to the Company's auditing and accounting principles and practices as
suggested by the independent auditors or management.
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