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AFLAC INCORPORATED
2017 PROXY STATEMENT
62
Audit and Risk Committee R port
Audit and Risk Committee Report
The Audit and Risk Committee of the Company’s Board of Directors is composed of six Directors, each of
whom, the Board has determined, is independent as defined by the NYSE listing standards and SEC rules and is
financially literate. The Board of Directors also has determined that all members of the Audit and Risk Committee
qualify as audit committee financial experts as defined by the SEC rules. The Audit and Risk Committee operates
under a written charter adopted by the Board of Directors. The charter, which is annually reviewed and complies
with all current regulatory requirements, can be viewed on the Company’s website,
www.aflac.com, by clicking on
“Investors,” then “Corporate Governance,” then “Audit and Risk Committee.”
In 2016, the Audit and Risk Committee met eleven times. During these meetings the Audit and Risk Committee
reviewed and discussed with management, KPMG (the Company’s independent registered public accounting
firm), the internal auditors, the chief risk officer, the general counsel and others a variety of topics, including the
Company’s earnings releases and SEC filings related to quarterly and annual financial statements, statutory
insurance financial statement filings, and the Company’s system of internal control over financial reporting. The
Audit and Risk Committee has discussed with, and received regular status reports from, the Company’s Director
of internal audit and KPMG on the overall scope and plans for their audits of the Company. The Audit and Risk
Committee met with the internal auditors and KPMG, with and without management present, to discuss the results
of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s
financial reporting.
The Audit and Risk Committee has monitored the Company’s compliance with Section 404 of the Sarbanes-Oxley
Act regarding the reporting related to internal control over financial reporting. The monitoring process has included
regular reports and representations by financial management of the Company, the internal auditors, and by KPMG.
The Audit and Risk Committee also has reviewed the certifications of Company executive officers contained in the
Annual Report on Form 10-K for the year ended December 31, 2016, as well as reports issued by KPMG related to
its audit of the consolidated financial statements and the effectiveness of internal control over financial reporting.
The Audit and Risk Committee is responsible for the appointment, compensation, retention and oversight of the
Company’s independent registered public accounting firm. In accordance with SEC rules and KPMG’s policies,
audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner
may provide service to the Company. For the lead audit partner, the maximum number of consecutive years of
service in that capacity is five years. The process for selecting the lead audit partner for the Company pursuant
to this rotation policy involves a meeting between the Chair of the Audit and Risk Committee and prospective
candidates, as well as discussions with the full Audit and Risk Committee and with management. The Audit and
Risk Committee evaluates the performance of KPMG, including the senior members of the audit engagement
team, each year and determines whether to reengage it or to consider other audit firms. In doing so, the Audit
and Risk Committee considers the quality and efficiency of the services provided; the firm’s global capabilities,
particularly in the U.S. and Japan; its technical expertise; its tenure as the Company’s independent registered
public accounting firm (KPMG has served in this capacity since 1973); and its knowledge of the Company’s
operations and industry. Based on this review and discussions with members of senior management, the Audit
and Risk Committee concluded it was in the best interest of the Company and the shareholders to recommend
KPMG to the Board of Directors to serve as the Company’s independent registered public accounting firm during
2016. Although the Audit and Risk Committee has the sole authority to appoint the independent auditors, the Audit
and Risk Committee will continue its long-standing practice of recommending that the Board ask the shareholders
to ratify this appointment (see RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM (Proposal 4)).
The Audit and Risk Committee also discussed with KPMG those matters required to be discussed under
the rules adopted by the Public Company Accounting Oversight Board (the PCAOB). The Audit and Risk
Committee received the written disclosures and the letter from KPMG required by applicable requirements of
the PCAOB regarding the independent auditors’ communications with the Audit and Risk Committee concerning
independence and has discussed with KPMG its independence. The Audit and Risk Committee considered with
KPMG whether the provision of non-audit services provided by it to the Company during 2016 was compatible
with its independence.