THE INDEPENDENT AUDITORS REGARDING FINANCIAL REPORTING) AND ANY OTHER
REGISTERED PUBLIC ACCOUNTING FIRM ENGAGED FOR THE PURPOSE OF PREPARING OR
ISSUING AN AUDIT REPORT OR PERFORMING OTHER AUDIT, REVIEW OR ATTESTATION
SERVICES FOR CHIRON, AND CHIRON'S INDEPENDENT AUDITORS AND ANY SUCH OTHER
REGISTERED PUBLIC ACCOUNTING FIRM SHALL REPORT DIRECTLY TO THE COMMITTEE;
(II)
TO APPROVE ALL AUDIT ENGAGEMENT FEES AND
TERMS, AS WELL AS ALL NON-AUDIT ENGAGEMENTS OF THE INDEPENDENT AUDITORS;
(III)
TO PRE-APPROVE ALL AUDIT AND NON-AUDIT
SERVICES TO BE PROVIDED BY THE INDEPENDENT AUDITORS, AND TO CONSIDER WHETHER
SUCH PROVISION OF NON-AUDIT SERVICES TO CHIRON IS COMPATIBLE WITH MAINTAINING
THE INDEPENDENCE OF THE INDEPENDENT AUDITORS;
(IV)
TO REVIEW ANNUALLY THE FEES BILLED FOR EACH OF
THE LAST TWO FISCAL YEARS FOR THE FOLLOWING CATEGORIES OF SERVICES RENDERED BY
THE INDEPENDENT AUDITORS:
(A) THE AUDIT OF CHIRON'S ANNUAL FINANCIAL STATEMENTS
AND THE REVIEWS OF THE FINANCIAL STATEMENTS INCLUDED IN CHIRON'S QUARTERLY
REPORTS ON FORM 10-Q FOR EACH SUCH FISCAL YEAR; (B) ASSURANCE AND RELATED
SERVICES THAT ARE REASONABLY RELATED TO THE PERFORMANCE OF THE AUDIT OR REVIEWS
OF CHIRON'S FINANCIAL STATEMENTS FOR EACH SUCH FISCAL YEAR, DESCRIBING EACH
SUBCATEGORY OF SERVICES COMPRISING THE FEES DISCLOSED UNDER THIS CATEGORY;
(C) TAX COMPLIANCE, TAX CONSULTING AND TAX PLANNING SERVICES FOR EACH SUCH
FISCAL YEAR; AND (D) ALL OTHER PRODUCTS OR SERVICES PROVIDED BY THE INDEPENDENT
AUDITORS FOR EACH SUCH FISCAL YEAR, DESCRIBING EACH SUBCATEGORY OF PRODUCTS OR
SERVICES COMPRISING THE FEES DISCLOSED UNDER THIS CATEGORY;
(V)
TO ASSESS THE INDEPENDENT AUDITORS'
INDEPENDENCE BY REVIEWING ALL RELATIONSHIPS BETWEEN THE INDEPENDENT AUDITORS AND
CHIRON, INCLUDING EACH NON-AUDIT SERVICE PROVIDED TO CHIRON AND THE MATTERS SET
FORTH IN INDEPENDENCE STANDARDS BOARD NO. 1, AND TO DISCUSS WITH THE INDEPENDENT
AUDITORS ANY RELATIONSHIPS OR SERVICES THAT MAY IMPACT THE QUALITY OF AUDIT
SERVICES OR THE OBJECTIVITY AND INDEPENDENCE OF CHIRON'S INDEPENDENT AUDITORS;
A1
(VI)
TO DISCUSS WITH THE INDEPENDENT AUDITORS IN
CONNECTION WITH ANY AUDIT OF CHIRON'S FINANCIAL STATEMENTS REQUIRED UNDER THE
SECURITIES LAWS, PRIOR TO EACH FILING OF THE AUDIT REPORT WITH THE SEC, ALL
CRITICAL ACCOUNTING POLICIES AND PRACTICES USED, ALL MATERIAL ALTERNATIVE
TREATMENTS OF FINANCIAL INFORMATION WITHIN GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES THAT HAVE BEEN DISCUSSED WITH MANAGEMENT, RAMIFICATIONS OF THE USE OF
SUCH ALTERNATIVE DISCLOSURES AND TREATMENTS, AND THE TREATMENT PREFERRED BY THE
INDEPENDENT AUDITORS, AND ANY MATERIAL WRITTEN COMMUNICATIONS BETWEEN THE
INDEPENDENT AUDITORS AND MANAGEMENT, SUCH AS ANY "MANAGEMENT REPRESENTATION"
LETTER, REPORTS ON OBSERVATIONS AND RECOMMENDATIONS ON INTERNAL CONTROL OR
SCHEDULE OF UNADJUSTED DIFFERENCES; AND
(VII)
TO DISCUSS WITH MANAGEMENT THE TIMING AND THE
PROCESS FOR IMPLEMENTING ROTATION OF ANY "AUDIT PARTNER" (AS DEFINED IN THE
RULES OF THE SEC) IN ACCORDANCE WITH THE RULES OF THE SEC WITH RESPECT THERETO.
2.
WITH RESPECT TO FINANCIAL REPORTING
PRINCIPLES AND POLICIES AND INTERNAL AUDIT CONTROLS AND PROCEDURES,
(I)
TO CONSIDER ANY REPORTS OR
COMMUNICATIONS (AND MANAGEMENT'S AND/OR THE INTERNAL AUDIT DEPARTMENT'S
RESPONSES THERETO) SUBMITTED TO THE COMMITTEE BY THE INDEPENDENT AUDITORS
REQUIRED BY OR REFERRED TO IN SAS 61 (AS CODIFIED