Summit does not believe that a SAS 71 Interim Review should be required for all companies. A full SAS 71 review may not be needed for companies with limited complexity and stable operations. For those companies, Summit does not believe quarterly financial reviews will reduce restatements or other year-end adjustments, nor will it result in lower audit fees. We would support actions which encouraged, not required, SAS 71 Interim Reviews and disclosure in the Form 10-Q of whether or not a company engages the outside auditor to do such reviews during the year. Proposal B - The Audit Committee Report Summit does not support the proposal to require the audit committee to provide a report disclosing whether the audit committee has reviewed and discussed the audited financial statements with management and discussed certain matters with the independent auditors in the proxy statement.
Proxy statements are already too long and complicated.
We suggest disclosing the duties and responsibilities of the audit committee, including reviewing and discussing the audited financial statements with management and discussing certain matters with the independent auditors, in the charter. By signing the Form 10-K, board members are already acknowledging that they have reviewed the propriety of the financial disclosures with management. Proposal C - Audit Committee Charters Summit supports the proposal that companies should disclose whether their audit committee is governed by a charter. However, we do not support the proposal that the charter be disclosed in the proxy statement. The cost of disclosing the charter in the proxy outweighs the benefit.