Siemens 2011 Annual Report Download - page 350

6 A. To our shareholders 51 C. Combined management’s discussion and analysis 23 B. Corporate Governance

In order to ensure the integrity of independent audits,
Siemens’ Audit Committee has established a policy to approve
all audit and permissible audit-related services provided by
our independent auditor prior to the auditor’s engagement.
As part of this approval process, the Audit Committee adopted
pre-approval policies and procedures pursuant to which the
Audit Committee annually pre-approves certain types of ser-
vices to be performed by Siemens’ independent auditor. Un-
der the policies, the Company ’s independent auditor is not al-
lowed to perform any non-audit services which either () may
impair the auditor’s independence under applicable German
regulations or the rules and regulations of the International
Ethics Standards Board for Accountants (IESBA), the Interna-
tional Federation of Accountants (IFAC), the U.S. Securities
and Exchange Commission (SEC) or the Public Company Ac-
counting Oversight Board (PCAOB) or () which can be more
effectively or economically provided by another provider,
even if permissible under the relevant independence rules.
Furthermore, the Audit Committee has limited the sum total
of all fees that may be incurred during a fiscal year for non-au-
dit services, including audit-related services, tax services and
other services, to % of the audit fees agreed upon for the re-
spective fiscal year. Primarily due to the audit-related services
pertaining to the sale of Siemens IT Solutions and Services
and the planned initial public offering of OSRAM, the Audit
Committee waived this limitation for fiscal year .
In fiscal  and , the Audit Committee has generally
pre-approved the performance by E&Y of audit and audit-relat-
ed services, including among others the following:
Audit services:
> Annual audit of Siemens’ Consolidated Financial State-
ments and its internal control over financial reporting
> Quarterly review of Siemens’ interim consolidated financial
statements;
> Audit and review services that are required by statute or
regulation, including statutory audits of financial state-
ments of Siemens AG and of its subsidiaries under the
rules of their respective countries
> Opening balance sheet audits in connection with acquisi-
tions, including audits with regard to the allocation of
purchase prices
Audit-related services:
> Voluntary local GAAP audits
> Due diligence relating to actual or contemplated acquisi-
tions and carve-outs, including consultation in accounting
matters
> Post-closing audits
> Carve-out audits and attestation services in the context of
carve-outs
> Certification services required by regulation, law or
contractual agreement
> Consultation concerning financial accounting and report-
ing standards based on the auditor’s knowledge of
Siemens-specific circumstances, including:
> Accounting advice relating to actual or contemplated
transactions or events
> Advice on the introduction and review of new or revised
accounting guidelines and requirements
> Training regarding accounting-related topics
> Comfort letters
> Employee benefit plan audits
> SAS  reports
> Attestation services subject to regulatory requirements,
including regulatory advice
> Attestation and audits in connection with the European
Community Directive on Waste Electrical and Electronic
Equipment
> Attestation of compliance with provisions or calculations
required by agreements
> Attest services in accordance with applicable standards,
other than audit services required by statute or other
regulation
Services that are not generally pre-approved as audit or audit-
related services require specific pre-approval by the Audit
Committee. An approval may not be granted if the service
falls into a category of services not permitted by current law
or if it is inconsistent with ensuring the auditor’s indepen-
dence, as expressed in the four principles promulgated by the
U.S. Securities and Exchange Commission: () an auditor may
not act as management or an employee of the audit client; ()
an auditor may not audit his or her own work; () an auditor
may not serve in an advocacy role for his or her client; and ()
an auditor may not provide services creating a mutual or con-
flicting interest between itself and the audit client.