Electronic Arts 2006 Annual Report Download - page 68

Annual Statement from the Independent Auditor. The Committee is responsible for obtaining from the
independent auditor at least annually, a formal written statement delineating all relationships between the
auditor and EA, consistent with Independence Standards Board Standard 1 (as such may be modiÑed or
superseded from time to time). The Committee shall be responsible for actively engaging in a dialogue
with the independent auditor with respect to any disclosed relationships or services that may impact the
objectivity and independence of the independent auditor and for taking, or recommending that the Board
of Directors take, such appropriate action as may be necessary to satisfy itself as to the qualiÑcations,
performance and independence of the independent auditor. To the extent required by law or regulation, the
annual statement also shall describe: (a) the Ñrm's internal quality control procedures, (b) any material
issues raised by the most recent internal quality-control review, or peer review, of the Ñrm, or by an
inquiry or investigation by governmental or professional authorities, within the preceding Ñve years,
respecting one or more independent audits carried out by the Ñrm, and (c) any steps taken to deal with
any such issues.
Risk Assessment and Accounting Controls. The Committee will review with the independent auditor,
EA's internal auditors, and appropriate Ñnancial and accounting personnel the adequacy and eÅectiveness
of the accounting and Ñnancial controls of EA, and guidelines and policies to govern the process by which
risk assessment and risk management is undertaken, and will elicit any recommendations for the
improvement of such internal control procedures or particular areas where new or more detailed controls or
procedures are desirable.
The Annual Audit. The Committee will meet with the independent auditor and Ñnancial management of
EA to review the scope of the proposed audit plan for the current year and the audit procedures to be
utilized, and approve the budget for such audit. At the conclusion of the annual audit, the Committee will
also review such audit, including any comments or recommendations of the independent auditor.
Review of Issues. The Committee will regularly review with the independent auditor any audit problems
or diÇculties the auditor encountered in the course of the audit work, including any restrictions on the
scope of the independent auditor's activities or on access to requested information, and any signiÑcant
disagreements with management, and management's response. In that regard, no oÇcer or director of EA,
or any other person acting under the direction thereof, shall violate any law or regulation that prohibits
fraudulently inÖuencing, coercing, manipulating, or misleading any independent auditor engaged in the
performance of an audit of the Ñnancial statements of EA for the purpose of rendering such Ñnancial
statements materially misleading.
Hiring Policies. The Committee will set clear hiring policies for employees or former employees of the
independent auditor consistent with statutory and regulatory requirements.
Related Party Transactions. The Committee will review and approve any ""related party transactions'', as
such term is deÑned by SEC rules and regulations and NASDAQ Marketplace Rules.
Complaint Procedures. The Committee will establish and maintain procedures for the (i) receipt,
retention, treatment, process and disposition of complaints received by EA regarding accounting, internal
accounting controls or audit matters, and (ii) the conÑdential, anonymous submission by employees of EA
of concerns regarding accounting or auditing matters.
Internal Audit Function. The Committee will oversee the internal audit function of EA, including the
independence and authority of its reporting obligations, its annual budget, the proposed audit plans for the
coming year, and the coordination of such plans with the independent auditor. The head of the Company's
internal audit function will report directly to the Committee. The Committee will receive, as necessary,
notiÑcation of material adverse Ñndings from internal audits and a progress report on the proposed internal
audit plan, as appropriate, with explanations for changes from the original plan.
Earnings Releases. The Committee will discuss earnings press releases and Ñnancial information and
earnings guidance provided to analysts and rating agencies, though this may be done generally (i.e.,
discussion of the types of information to be disclosed and the type of presentation to be made) and the
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