Why do I keep getting the ReferenceError in node.js

I'm going the the Smashing Node.JS book and I keep getting a Reference Error when doing the file-explorer example. Why is this occurring and how can I correct the problem. I've follow the example in the book so I'm a little lost as to what's happening

    /**
* Module dependencies. 
*/ 

    var fs = require('fs')
        , stdin = process.stdin
        , stdout = process.stdout;

    fs.readdir(process.cwd(), function (err, files) {
      console.log('');

     if (!files.length) {
      return console.log('  \033[31m No files to show!\033[39m\n'); 
     } 

      console.log(' Select which file or directory you want to see\n');

      function file(i) {
    var filename = files[i]; 

    fs.stat(__dirname + '/' + filename, function (err, stat) {
      if (stat.isDirectory()) {
        console.log('   '+i+'   \033[36m' + filename + '/\033[39m'); 
      } else {
        console.log('       '+i+'   \033[90m' + filename + '\033[39m')
      }

      if (++i == files.length) {
        read();
      } else{
        file(i); 
      }
    });
  }

  file(0); 
});

function read() {
    console.log(''); 
    stdout.write('  \033[33mEnter your choice: \033[39m');

    stdin.resume(); 
    stdout.setEncoding('utf8'); 

    stdin.on('data', option); 

    function option( data ) {
        if (typeof files[Number(data)] !== "undefined" ) {
            stdout.write('  \033[31mEnter your choice: \033[39m');
        } else {
            stdin.pause(); 
        }
    }

}

At the moment read() is called, it does not have access to files, thus the reference-error when using typeof files[...].

An idea might be to move the }); after file(0) to the bottom of the file, thus having read in the fs.readdir(process.cwd(), function (err, files) { block which defines files.

However, I really hope this example will be expanded upon in your book: right now, it's not going to output the directory content of the dir you've selected, but will prompt you to enter a number over and over again.

Alternately pass files to the read function.

Mind you, the example code is really pretty terrible and I hope the author is trying to make some point with this other than holding it up as good code.

So, continuing in the vein of bad code here is a complete working example:

var fs = require('fs')
    , stdin = process.stdin
    , stdout = process.stdout;

fs.readdir(process.cwd(), function (err, files) {
    console.log('');

    if (!files.length) {
        return console.log('  \033[31m No files to show!\033[39m\n');
    }

    console.log(' Select which file or directory you want to see\n');

    function file(i) {
        var filename = files[i];

        fs.stat(__dirname + '/' + filename, function (err, stat) {
            if (stat.isDirectory()) {
                console.log('   '+i+'   \033[36m' + filename + '\033[39m');
            } else {
                console.log('       '+i+'   \033[90m' + filename + '\033[39m')
            }

            if (++i == files.length) {
                read(files);
            } else{
                file(i);
            }
        });
    }

    file(0);
});

function read(files) {
    console.log('');
    stdout.write('  \033[33mEnter your choice: \033[39m');

    stdin.resume();
    stdout.setEncoding('utf8');

    stdin.on('data', option);

    function option( data ) {
        var filename = files[Number(data)];
        if (typeof filename !== "undefined" ) {
            stdout.write('\n\033[90m' + filename + ':\n\n');
            var fileContents = fs.readFileSync(filename)
            stdout.write(fileContents);
            stdout.write('\033[39m\n\n');

            stdout.write('  \033[31mEnter your choice: \033[39m');
        } else {
            stdin.pause();
        }
    }
}