Electronic Arts 2014 Annual Report Download - page 30

ensures that a coordinated approach is used to address issues that may impact our businesses across multiple
geographies and legal entities. Few audit firms have the knowledge of our sector and the capability of servicing
our global audit requirements. KPMG LLP has the geographical scope that our operations require and the
accounting expertise in the matters relevant to our sector. In addition, KPMG LLP’s experience working with the
Company gives them the institutional knowledge to understand our operations and processes, which we believe
helps them address the relevant issues and improves the quality of the audit.
In appointing KPMG LLP as our independent auditors for fiscal 2015, the Audit Committee and the Board of
Directors have considered the performance of KPMG LLP in fiscal 2014, as well as in prior years, and have
taken into account the alternative options available to the Company. The Audit Committee and the Board of
Directors have determined that it is in the best interest of the Company to continue KPMG LLP’s engagement.
We believe the experience and expertise held by the members of the Audit Committee give them the necessary
skills to evaluate the relationship between the Company and its independent auditors and to oversee auditor
independence. In addition, the Audit Committee is empowered under its charter to obtain advice and assistance
from outside legal, accounting and other advisors as it deems appropriate.
At each meeting of the Audit Committee, Company management is provided the opportunity to meet in private
session with the Audit Committee to discuss any issues relating to KPMG LLP’s engagement. Similarly, KPMG
LLP regularly meets in private session with the Audit Committee with no members of Company management
present. In addition, Company management and members of the Audit Committee regularly participate in a
survey to evaluate KPMG LLP’s performance, which is administered by an independent third party. Information
collected from this survey is reviewed by a KPMG LLP partner unaffiliated with the Company’s engagement to
address any issues raised.
Audit Partner Rotation
Our KPMG LLP lead audit partner and concurring audit partner have been working on the Company’s audit
since the first quarter of fiscal 2011 and the second quarter of fiscal 2010, respectively. Both audit partners may
serve a maximum of five years on the Company’s audit. Candidates are proposed by KPMG LLP based on their
expertise and experience and are vetted by Company management and a recommendation is made to the Audit
Committee. The Audit Committee has final approval of the lead audit partner and the concurring audit partner.
Pre-approval Procedures
The Audit Committee is required to pre-approve the engagement of, and has engaged, KPMG LLP to perform
audit and other services for the Company and its subsidiaries. The Company’s procedures for the pre-approval
by the Audit Committee of all services provided by KPMG LLP comply with SEC regulations regarding pre-
approval of services. Services subject to these SEC requirements include audit services, audit-related services,
tax services and other services. The audit engagement is specifically approved and the auditors are retained by
the Audit Committee. In some cases, pre-approval for a particular category or group of services is provided by
the Audit Committee for up to a year, subject to a specific budget and to regular management reporting. In other
cases, the Chairman of the Audit Committee has the delegated authority from the Audit Committee to pre-
approve additional services up to a specified dollar limit, and such pre-approvals are then communicated to the
full Audit Committee. The Audit Committee reviews quarterly the status of all pre-approved services to date and
approves any new services to be provided.
In determining whether to approve additional non-audit services, the Audit Committee considers the level of non-
audit fees incurred to date as a percentage of the total annual fees paid to KPMG LLP. In addition, the Audit
Committee considers additional factors to assess the potential impact on auditor independence of KPMG LLP
performing such services, including whether the services are permitted under the rules and recommendations of
the Public Company Accounting Oversight Board, the American Institute of Certified Public Accountants, and
the NASDAQ Stock Market, whether the proposed services are permitted under EA’s policies, and whether the
proposed services are consistent with the principles of the SEC’s auditor independence rules. The Company also
annually confirms with each of its directors and executive officers whether there are any relationships that they
are aware of with KPMG LLP that may impact the auditor independence evaluation. The Audit Committee
considered and determined that fees for services other than audit and audit-related services paid to KPMG LLP in
fiscal 2014 are compatible with maintaining KPMG LLP’s independence.
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