Mercedes 2013 Annual Report Download - page 169

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E | Corporate Governance | Report of the Audit Committee
Also in this meeting, the Audit Committee discussed the report
on the fees paid to the external auditors in the year 2012 for
auditing and non-auditing services. With due consideration of the
results of the independence review, the Audit Committee
decided to recommend to the Supervisory Board, and subse-
quently to the Annual Shareholders’ Meeting, that KPMG be
engaged to conduct the annual external audit and the external
auditors’ review of interim financial reports for financial year
2013. The Audit Committee partially based its recommendation
on the very good results of its own quality analysis carried
out in May and June 2012 of the external audit for the previous
financial year. Subject to the outcome of voting by the Annual
Shareholders’ Meeting, the Committee approved the fees to be
agreed upon with the external auditors for financial year 2013.
Finally, on the basis of its responsibility, the Audit Committee
dealt with the draft agenda for the 2013 Annual Shareholders’
Meeting and the annual audit plan of the Internal Auditing
department.
In the meetings during 2013 relating to the quarterly results,
the Audit Committee discussed the interim financial reports
before their publication with the Board of Management and
with the company of auditors engaged to carry out the auditors’
review of interim financial statements, dealt with the respective
risk reports, and received reports from the Group Compliance
and Corporate Audit departments. In addition, the Audit
Committee dealt on a quarterly basis with notifications from
employees of the Company concerning possible violations
of rules. Employees and third parties submitted these notifica-
tions confidentially and if desired anonymously (if compatible
with local data-protection law) to the Company’s own whistle-
blower system, the BPO (Business Practices Office), which
then processed them. Until February 2013, the Audit Committee
regularly communicated with the independent monitor, Judge
Louis Freeh. On the occasion of his last participation in a meet-
ing of the Audit Committee, Judge Freeh reported on his final
impressions of the status of compliance at Daimler. Judge Freeh
stated that the Group’s management and employees had
acted in an extremely committed manner. He explained that as
a result, it had been possible to establish a compliance system
of the highest standards, which could bear any comparison
at an international level. The Audit Committee thanked Judge
Freeh for his constructive cooperation in the past years.
The Audit Committee received the report on non-audit services
provided by the external auditors in its meeting in June 2013.
In this meeting, the important audit issues for the external audit
of the reporting period and the framework of approval for
engaging the external auditors to provide non-audit services
were determined. This meeting was also used to analyze the
audit for the year 2012 and to perform the Audit Committee’s
monitoring duties with regard to the financial reporting process
and the functional capabilities of the internal control system, the
risk management system and the internal auditing system. On
the basis of the statements of the external auditors as assessed
by the Audit Committee, the internal control and risk man-
agement system was dealt with in this context. As well as the
area of financial reporting, the internal control system includes
the functions of internal auditing and compliance management.
The Committee discussed the activity reports on the internal
control and risk management system and dealt in particular detail
with changes to the system and its further development.
Also in the meeting in June 2013, the Audit Committee dealt with
new developments in accounting and financial reporting and
other audit-relevant areas; the members of the Committee hereby
undertook the training and further training required among
other things for the performance of their tasks. The Committee
also received information on the status of legal risks, on the
new pension management system, on the status of currency and
liquidity management and on other current topics.
Dr. Bernhard Walter, Chairman of the Audit Committee.