EasyJet 2013 Annual Report Download - page 74

easyJet plc Annual report and accounts 2013
72
External auditors
The Audit Committee has responsibility for
making a recommendation on the appointment,
re-appointment and removal of the external
auditors. PricewaterhouseCoopers LLP were
reappointed auditors of the Group at the Annual
General Meeting held in February 2013. During the
year the Committee received and reviewed audit
plans and reports from the external auditors. It is
standard practice for the external auditors to meet
privately with the Audit Committee without any
member of management or the Executive Directors
being present at each Audit Committee meeting.
Audit tendering
The Audit Committee has noted the changes to
the Code, the recent findings of the Competition
Commission and the Guidance for Audit
Committees issued by the Financial Reporting
Council, each in the context of tendering for the
external audit contract at least every ten years. The
Company’s external audit was last tendered in
2005, resulting in a change of external auditors in
2006 to PricewaterhouseCoopers LLP. Since 2006,
there have been two different senior statutory
auditors in line with the required rotation timetable.
Having previously conducted a full tender exercise
and considered retendering in subsequent years,
the Committee will continue to give consideration
to the timing of the next formal tender in light of
the regulatory requirements and any further
changes in the regulatory framework. In any event,
we do not anticipate that this will be earlier than the
date of the rotation of the current senior statutory
auditor. There are no contractual obligations that
restrict the choice of external auditors.
Effectiveness of external auditors
To assess the effectiveness of the external audit
process, the auditors are asked on an annual basis
to articulate the steps that they have taken to
ensure objectivity and independence, including
where the auditor provides non-audit services.
easyJet monitors the auditors’ performance,
behaviour and effectiveness during the exercise of
their duties, which informs the Audit Committee’s
decision to recommend reappointment on an
annual basis. This included this year obtaining
a report on the auditors’ own quality control
procedures and consideration of their annual
audit quality and transparency report.
Non-audit services
The Audit Committee’s terms of reference set
out that they are responsible for the formal policy
on the award of non-audit work to the auditors.
In order to preserve auditor objectivity and
independence, PricewaterhouseCoopers LLP are
not asked to provide consulting services unless
this is in the best interests of the Company. In the
current financial year, PricewaterhouseCoopers LLP
did provide services in reporting on profit forecast
and working capital in connection with the fleet
order circular which falls under the Listing Rules
as a class 1 transaction. It was considered that the
services should be provided by the external auditor
given their existing knowledge of the business,
working capital and profits. It was also determined
that the nature of the work would not undermine
auditor objectivity and independence. This
additional scope of work is in line with easyJet’s
non-audit services policy which is available in
the governance section of easyJet’s corporate
website, http://corporate.easyJet.com. In the
financial year, easyJet spent £0.3 million with
PricewaterhouseCoopers LLP (2012: £nil) in
respect of non-audit services.
David Bennett
Chairman of the Audit Committee
18 November 2013
Governance
Audit Committee report continued