Intel Sets Contest for Audit Contract

Intel Corp. asked Ernst & Young, its auditor of 35 years, to reapply for the job along with the other three giant accounting firms as part of an effort to make Intel’s corporate governance more transparent, the company said Wednesday.

The world’s largest semiconductor manufacturer said that in the wake of heightened investor and regulatory scrutiny of large corporations over the last year, it wanted to consider taking a “fresh look” at its financial accounting.

Others invited to apply are Deloitte & Touche, PricewaterhouseCoopers and KPMG.

In a proxy statement, the Santa Clara chip manufacturer said the audit committee of its board “wanted the opportunity for a detailed review of other auditing firms as prospective independent auditors.”

In reaction to a string of corporate accounting scandals last year, Congress in 2002 passed the Sarbanes-Oxley Act to strengthen the authority and responsibility of corporate audit committees.

Intel laid out a number of policies that had long been practiced by the company but would now be mandated, including the separation of the chairman and chief executive positions, a requirement that board members stand for reelection each year, age limits for directors and a rule that key committees, such as audit and compensation, be composed only of independent board members.

“Given the amount of attention to corporate governance in the last year and a half, the board felt more transparency and clarity is important,” Intel spokesman Chuck Mulloy said. “We feel we have had some important corporate governance practices in place, and thought it was important to codify them.”

Also, Intel CEO Craig Barrett received a raise in his base salary in 2002 to $610,000 from $575,000 the year before, though his bonus fell to $1,070,400 from $1,075,300, according to the proxy.

Intel shares climbed $1.10, or 6.7%, to close at $17.52 on Nasdaq.