Travelzoo 2005 Annual Report Download - page 19

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 indepen-
dent 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.
B. Management
1. Discuss at least annually with the Company's management and outside counsel the eÅectiveness
of the Company's legal compliance programs, any legal matters that may have a material impact on the
Company's Ñnancial statements and any material reports or inquiries received from regulators or
government agencies.
A-2