EasyJet 2014 Annual Report Download - page 65

www.easyJet.com 63
Governance
• the input of subject matter experts, the Executive
Management Team and other senior management,
and where applicable, the Board and its Committees;
• the processes and controls which underpin the
overall review and confirmation process, including the
verification process being carried out by an internal
financial controls specialist (independent of the finance
function); and
• internal audit providing assurance over the audit trail
for material data points relating to the non-financial
statement aspects of the Annual report and accounts,
and external audit providing assurance over the accounts.
The Committee was provided with, and commented on,
a draft copy of the Annual Report and accounts.
In carrying out the above processes, key considerations
included ensuring that there was consistency between the
accounts and the narrative provided in the front half of
the annual report, and that the programme of corporate
reporting reviews focused on the balance between the
reporting of weaknesses, difficulties and challenges, as well
as successes, in an open and honest manner.
Risk management and internal control
The Board, as a whole, including the Audit Committee
members, considers the nature and extent of easyJet’s
risk management framework and the risk profile that is
acceptable in order to achieve the Company’s strategic
objectives. As a result, it is considered that the Board has
fulfilled its obligations under the Code.
easyJet’s system of internal controls, along with their
design and operating effectiveness is subject to review
by the Audit Committee, through reports received from
management, along with those from both internal and
external auditors. No significant deficiencies were noted
in the review. Further details of risk management and
internal control are provided on page 70.
Internal audit
The Audit Committee is responsible for overseeing
the work of the Internal Audit function. It reviews and
approves the scope of the internal audit annual plan and
assesses the quality of Internal Audit reports, along with
management’s actions relating to findings and the closure
of recommended actions. The Audit Committee also
considers stakeholder feedback on the quality of Internal
Audit’s work. Further information on the Internal Audit
function is provided on page 70. In order to safeguard the
independence of the Internal Audit function, the Head of
Internal Audit is given the opportunity to meet privately
with the Audit Committee without any members of
management present.
External auditors and effectiveness of external
audit process
PricewaterhouseCoopers LLP were re-appointed auditors
of the Company at the 2014 Annual General Meeting.
Senior management monitors the auditors’ performance,
behaviour and effectiveness during the exercise of their
duties, which informs the Audit Committee’s decision to
recommend re-appointment on an annual basis.
The assessment of the effectiveness of the external audit
process and the independence and objectivity of the
external auditors includes:
• conducting a post year end review of the audit process
involving input from the Chief Financial Officer, senior
management in the finance department, and their
respective teams;
• holding a feedback session between the Group Financial
Controller and the Senior Statutory Auditor and audit
director following the post year end review; and
• maintaining regular dialogue between the external
auditors and the Chief Financial Officer, the Group
Financial Controller and Internal Audit.
The Audit Committee also assesses the effectiveness,
independence and objectivity of the external auditors by,
amongst other things:
• considering all key external auditor plans and reports;
• having regular engagement with the external auditors
during Committee meetings and ad hoc meetings
(when required), including meetings without any member
of management being present;
• the Committee Chair having discussions with the
Senior Statutory Auditor ahead of each Committee
meeting; and
• following the end of the financial year, each Committee
member completing an auditor effectiveness review
questionnaire.
The auditors are also asked on an annual basis to articulate
the steps they have taken to ensure objectivity and
independence, in relation to the audit and the provision
of non-audit services. As a result, the Committee receives
reports on the auditors’ independence and internal quality
control procedures and considers their annual audit quality
and transparency report.
Non-audit services
In the 2014 financial year, easyJet did not incur any costs
with PricewaterhouseCoopers LLP in respect of non-audit
services (2013: £0.3 million). In order to preserve objectivity
and independence, the external auditors are not asked to
provide consulting services unless this is in the best interests
of the Company, in accordance with easyJet’s non-audit
services policy which is available in the governance section
of easyJet’s corporate website: http://corporate.easyJet.com
Audit tendering
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
rotation requirements. The Audit Committee intends
to carry out a re-tendering process during 2015 as the
current Senior Statutory Auditor’s last audit will be the 2015
financial year audit. There are no contractual obligations
that restrict the choice of external auditors.
Adèle Anderson
On behalf of the Audit Committee