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48 Experian Annual Report 2008
Corporate governance statement continued
One of the primary responsibilities of the audit committee is to make recommendations to the board in relation to the
appointment, re-appointment and removal of the external auditors. A number of factors were taken into account by
the committee in assessing whether to recommend the external auditors for re-appointment. These included:
The quality of reports provided to the audit committee and the board and the quality of advice given;
l
The level of understanding demonstrated of the Group’s businesses and its sectors; and l
The objectivity of the external auditors’ views on the controls around the Group and their ability to co-ordinate a global l
audit working to tight deadlines.
As part of this review, the committee reviewed a report on the external auditors’ own quality control procedures.
The committee recognises that auditor independence is an essential part of the audit framework and the assurance
it provides and the committee has established control processes to safeguard the objectivity and independence of
the external auditors and to ensure that the independence of the audit work undertaken by the external auditors is not
compromised.
The committee has established a policy covering the type of non-audit work that can be assigned to the external
auditors. The auditors may only carry out such services provided that such advice does not conflict with their statutory
responsibilities and ethical guidance. These services are:
Further assurance services – where the external auditors’ deep knowledge of the Group’s affairs means that they may be
l
best placed to carry out such work. This may include, but is not restricted to, shareholder and other circulars, regulatory
reports and work in connection with acquisitions and divestments.
Taxation services – where the external auditors’ knowledge of the Group’s affairs may provide significant advantages which
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other parties would not have. Where this is not the case, the work is put out to tender.
General – in other circumstances, the external auditors may provide services, provided that proposed assignments are put out
l
to tender and decisions to award work are taken on the basis of demonstrable competence and cost effectiveness. However,
certain areas of work are specifically prohibited including work related to accounting records and financial statements that will
ultimately be subject to external audit; management of, or significant involvement in, internal audit services; any work that could
compromise the independence of the external auditors; and any other work that is prohibited by UK ethical guidance.
The audit committee chairman’s pre-approval is required before the Group uses non-audit services that exceed
financial limits set out in the policy.
The committee receives half-yearly reports providing details of assignments and related fees carried out by the
external auditors in addition to their normal work. Fees in respect of such assignments carried out in the year under
review are set out in note 7 to the financial statements on page 90.
Corporate governance committee
In addition to the principal board committees, the board has established a number of other committees including a
corporate governance committee with written terms of reference to assist in its monitoring of corporate governance
issues. The committee’s responsibilities include keeping under review all legislative, regulatory and corporate
governance developments that might affect the Company’s operations and making recommendations to the board
in relation to them. The members of the corporate governance committee are the Chairman, the Chief Executive
Officer, the senior independent director and the Company Secretary. The committee met during the year and
made recommendations to the board on a number of matters resulting from the changing regulatory and legislative
environment.
Accountability and audit
The board acknowledges that it is responsible for the Group’s system of internal control and for reviewing its
effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business
objectives and can provide reasonable, but not absolute, assurance against material misstatement or loss. The board
reviews annually the effectiveness of the key procedures which have been established to provide internal control.