Telstra 2007 Annual Report Download - page 151

Telstra Corporation Limited and controlled entities
148
Notes to the Financial Statements (continued)
Audit fees
(i) Ernst & Young (EY) is appointed as our external auditor for fiscal
2007.
The Australian National Audit Office (ANAO) was our Australian
statutory auditor in fiscal 2006, however the audit provided by the
ANAO had been subcontracted to EY since fiscal 2000. In accordance
with section 36(1) of the Telstra Corporation Act 1991, the Auditor-
General for Australia resigned as our ext ernal auditor effective 12
December 2006.
(ii) Audit fees charged by EY during fiscal 2006 relate to audit services
provided in completing our statutory and regulatory filings other
than those subcontracted directly from the ANAO. These services
include the audit and review of our offshore controlled entities, the
regulatory audits and our USGAAP audit. In addition, this category
includes the audit of our other statutory filings such as the filing we
are required to make under Japanese law, and the annual report on
Form 20-F to meet United States listing requirements.
Other services
We have processes in place to maintain the independence of the
ext ernal auditor, including the level of expenditure on non-audit
services. EY also has specific internal processes in place to ensure
auditor independence.
Fees earned by EY for non-audit services are capped at a maximum of
1.0 times the total audit and audit related fees.
Non-audit services are pre-approved by the Audit Committee provided
they fall within a defined list of services specified by the Audit
Committee. Those non-audit services that are not listed have to be
specifically approved by the Audit Committee prior to the
commencement of any engagement. In addition, all non-audit
services with a value over $100,000 must be separately approved by
the Audit Committee, even if the service is listed as a pre-approved
service.
The provision of non-audit services by EY is monitored by the Audit
Committee via bi-annual reports to the Audit Committee. In addition,
where engagements involve services from the defined list of services,
these are reported to the Audit Committee at the following meeting.
(iii) Audit related fees charged by EY are for services that are
reasonably related to the performance of the audit or review of our
financial statements and other assurance engagements. These
services include our privacy audit, various accounting advice and
additional audit services arising on the acquisition of newly acquired
controlled ent ities. Fiscal 2007 includes $1.253 million for services
related to the Telstra 3 Share Offer.
(iv) Tax fees charged by EY mainly relates t o licence fee and technical
services, including training and support services in relation to our tax
return software.
(v) Other services relat e to all additional services performed by EY,
other than those disclosed as auditing and reviewing the financial
report, audit related and tax. These services include the performance
of system and security reviews and various ot her reviews and non
assurance services across the Company.
8. Remuneration of auditors
Telstra Group Telstra Entity
Year ended 30 June Year ended 30 June
2007 2006 2007 2006
$m $m $m $m
Audit fees
Ernst & Young has charged the following amounts for auditing and reviewing the
financial reports (i) (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.650 2.900 6.663 1.601
The Australian National Audit Office has charged the following amounts for auditing and
reviewing the financial reports (i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.981 -4.431
Other audit firms have charged the following amounts for auditing and reviewing the
financial reports of controlled entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.288 ---
Total audit fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.938 7.881 6.663 6.032
Other services
In addit ion to auditing and reviewing the financial reports, other services were
provided by Ernst & Young in their own right as follows:
Audit related (iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.970 0.829 1.970 0.538
Tax (iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.077 0.118 0.077 0.111
Other services (v) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.626 0.331 0.009 0.261
Total other services provided . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.673 1.278 2.056 0.910