BT 2015 Annual Report Download - page 105

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Overview
The Strategic Report
Purpose and strategy Delivering our strategy 0ur lines of business Group performance Governance
Financial statements Additional information
ternal audit
e
 considered and approved the auditors roup audit plan  thisfollowed
discussion with the auditors on the scope of the wor to be undertaen
as well as their consideration of ris inforin their plan
 reviewed reports on eternal audit findins
 considered the independence of the auditors and their eectiveness
tain account of responses fro a uestionnaire tareted at specific
staeholders as well as our own assessent  we concluded the
were independent and recoended the be re-appointed b the
oardand
 considered and approved the letter of representation issued to the
eternal auditors.
e discussed these areas of focus with the auditors when the presented
their audit plan aain at the tie of their review of the half-ear results
and at the conclusion of their audit of the financial stateents for the
ear. s the concluded their audit the eplained
 the results of their testin of the controls and other procedures carried
out in the relevant overseas locations and an other issues the had
found there
 the had reviewed the appropriateness and application of the roups
accountin policies and
 the wor the had done to test anaeents assuptions and
estiates in particular in relation to the identified areas of audit focus
set out above.
anaeent reported to the coittee that it was not aware of an
aterial isstateent and the auditors also reported the isstateents
the had found in the course of their wor. he coittee confired
that these unadusted isstateents were not aterial to the financial
stateents.
Audit tender
ricewaterhouseoopers and its predecessor firs have been s
auditors since  listed on the ondon toc chane in 19.
heeternal auditors are reuired to rotate the lead partner ever
five ears and other partners who are responsible for the roup and
subsidiar audits ust chane at least ever seven ears. uch chanes
are carefull planned to ensure business continuit without undue ris
orinecienc. he partner responsible for s audit is copletin his
sith ear within the roup audit tea and his third ear as lead partner
which is a role he can continue for a further ear.
e are aware of the relevant reulation and uidance on audit
tenderin. U reulations and the opetition and arets uthorits
rulin will ipose rotation reuireents eanin that the roups
auditors ust be chaned b 01.
he coittee will continue to consider annuall the tietable for audit
tenderin and rotation tain into account the annual review of the
eectiveness of the auditors and other relevant factors such as chane
proraes ipactin the business. s we enae a nuber of audit
firs for non-audit services we will carefull plan the rotation to ensure
that the new auditors are independent.
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e discussed the ualit of the audit throuhout the ear and consider
the perforance of our eternal auditors ricewaterhouseoopers
annuall tain into account feedbac fro a surve tareted at various
staeholders across the business and the coittees own assessent.
he evaluation focuses on robustness of the audit process ualit of
deliver reportin and people and services. he eternal auditors
perforance was rated as eetin or eceedin epectations and the
ualit of wor and value add has been aintained. oe staeholders
felt that the would benefit fro ore detailed feedbac durin the
audit process and reater value add throuh trainin in new accountin
ris and overnance developents.
Independence and objectivity
 has areed policies in place on what non-audit services the eternal
auditors can provide and the relevant approval process. he eternal
auditors are not peritted to perfor an wor which the a be
later reuired to audit or which iht aect their obectivit and
independence or create a conict of interests. here are internal
procedures in place for the approval of wor iven to the eternal
auditors the e points of which are
 no wor a be placed with the eternal auditors without the
concurrence of the roup inance irector or his deleate
 certain non-audit wor cannot be iven to the eternal auditors.
therwor a be areed if there are clear business benefits of
usinthe eternal auditors rather than an alternative supplier
 specific approval is reuired in advance fro the coittee or
coittee chairan for all audit and non-audit services unless it is
included on the list of pre-approved services or is below 10000 and
 non-audit fees are reported uarterl to the coittee.
e onitored copliance with the areed policies and the level of
non-audit fees paid to the auditors in order to satisf ourselves that the
tpes of services bein provided and the fees incurred were appropriate.
ou can see details of non-audit services carried out b the eternal
auditors in note  to the consolidated financial stateents. n this contet
audit-related assurance services are considered to pose a low threat to
auditor independence and therefore the proportion of other non-audit
services to total services is considered the ost suitable easure of the
non-audit services provided. hese represented  of the total fees
0111. he priar reason for the increase is for the eportin
ccountants wor perfored b the eternal auditors in relation to the
proposed acuisition of  and the shareholder circular. cludin this
wor the ratio was 1. urther details of the non-audit services that
are prohibited and allowed under the polic can be found in the corporate
overnance section of the  website.
he coittee is satisfied that the overall levels of audit and non-audit
fees are not aterial relative to the incoe of the eternal auditors as a
whole and therefore that the obectivit and independence of the eternal
auditors was not coproised.
Internal audit
n pril 01 we endorsed the internal audit plan of wor.
hisinterates the assurance reuireents for the internal financial
controls testin prorae the copans overseas footprint and
the roups ris assurance appin. t includes coverae of static and
dnaic riss. Ke areas of focus across the nternal udit plan included
data coproise privac and protection includin cber securit
financial anaeent and controls custoer service revenue assurance
and billin procureent and supplier contract overnance and aor
contracts for networed  services.
e reviewed all reports fro the internal auditors and ensured that
anaeent too appropriate action on issues arisin fro those
reports. e onitored anaeents responsiveness to the internal
auditors findins and recoendations. aples included phsical
access securit data sereation and the lobal finance platfor
developent and identification of new controls. e discussed with
anaeent the actions reuired to brin these atters to resolution
and areed that deliver plans are in place.
e onitor the relationship between the internal and eternal auditors
and at the end of the ear we received a report on the perforance of
internal audit.