Travelzoo 2007 Annual Report Download - page 28

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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 five (5) previous fiscal 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 financial 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 modified or supplemented.
6. Review and discuss, prior to filing, the Company’s financial statements proposed to be included in the
Company’s Annual Report on Form 10-K with the Company’s financial management and independent auditors,
including major issues regarding accounting and auditing principles and practices as well as the adequacy of
internal controls that could significantly affect the Company’s financial statements. If deemed appropriate after
such review and discussion, recommend to the Board that the financial statements be included in the Annual Report
on Form 10-K.
7. Review and discuss, prior to issuance or filing, the Company’s financial 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
financial 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
effectiveness of the Company’s internal financial 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 difficulties 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 financial risk.
9. Review with management and the independent auditors any comments or inquiries from the Securities and
Exchange Commission relating to the Company’s financial statements or other financial matters included in the
Company’s filings 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 affiliated 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 effectiveness of the
Company’s legal compliance programs, any legal matters that may have a material impact on the Company’s
financial statements and any material reports or inquiries received from regulators or government agencies.
2. Review all related party transactions and potential conflict of interest situations involving the Company’s
principal shareholders or members of the Board or senior management.
3. Authorize and oversee investigations deemed appropriate by the Committee into any matters within the
Committee’s scope of responsibility as described in this Charter or as may subsequently be delegated to the
Committee by the Board, with the power to retain independent counsel, accountants and other advisors and experts
to assist the Committee if deemed appropriate and to determine appropriate compensation for such advisors.
A-2