Experian 2011 Annual Report Download - page 72

70 Experian Annual Report 2011
Corporate governance statement continued
•Reviewed other services provided by
the external auditors, evaluated their
performance and monitored their
independence, concluding that they
had maintained their independence
throughout the year ended 31 March 2011.
•Evaluated its own performance and
concluded that its terms of reference
remained appropriate.
External auditors
PricewaterhouseCoopers LLP have been
the Company’s auditors since demerger
in October 2006. The Audit Committee
considers that the relationship with the
auditors is working well and remains
satisfied with their effectiveness.
Accordingly, to date the Committee has
not considered it necessary to require the
auditors to tender for the audit work. There
are no contractual obligations restricting the
Company’s choice of external auditor.
PricewaterhouseCoopers provide a range
of other services to Experian and, to ensure
auditor objectivity and independence, a
policy has been adopted by the Company in
relation to the provision of such services.
The policy includes financial limits above
which the Chairman of the Audit Committee
must pre-approve any proposed non-audit
services. The Audit Committee receives
half-yearly reports containing details of
assignments carried out by the external
auditors in addition to their normal work,
together with details of related fees. The
payment of non-audit fees to the Company’s
auditors is capped at 100% of fees for
audit and assurance services, except in
exceptional circumstances, and an analysis
of fees paid to the external auditors for the
year ended 31 March 2011 is set out in note 11
to the Group financial statements.
In addition to the policy summarised above,
the external auditors maintain safeguards to
ensure the objectivity and independence of
their service teams. The safeguards include
the rotation of the lead audit engagement
partner and the use of separate teams,
where appropriate.
Internal control
Maintaining an effective system of internal
control is central to identifying and
managing risks that may impact on the
achievement of the Company’s strategy.
Having such a system supports effective
and efficient operations, the development
of robust and reliable internal and external
reporting and compliance with laws and
regulations.
The Board is required to maintain a
sound system of internal control, to
safeguard shareholders’ investment and
the Company’s assets. In addition, as part
of their responsibilities, the directors are
required, at least annually, to conduct a
review of the effectiveness of the Group’s
system of internal control and should
report to shareholders that they have done
so. The review must cover all material
controls, including financial, operational and
compliance controls and risk management
systems. A system of internal control 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
financial misstatement or loss.
The Board has overall responsibility
for maintaining the system of internal
control for the Group and monitoring its
effectiveness, and confirms that there is an
ongoing process for identifying, assessing
and mitigating the significant risks faced by
the Group, including those risks relating to
social, ethical and environmental matters.
Further details on this process can be found
in the risks and uncertainties section of
the business review section. The process
was in place throughout the year under
review and up to the date of approval of the
annual report and meets the requirements
of the UK Corporate Governance Code. For
certain joint arrangements, the Board places
reliance upon the systems of internal control
operating within the partners’ infrastructure
and the obligations upon partners’ boards
relating to the effectiveness of their own
systems. In the Board’s view, the information
it received was sufficient to enable it to
review the effectiveness of the Group’s
system of internal control in accordance
with the Turnbull Guidance ‘Internal Control
Revised Guidance for Directors’ contained
in the UK Corporate Governance Code.
At its meeting in May each year, the Audit
Committee, under delegated authority from
Policy on the provision of non-audit services
Provided that the provision of such services does not conflict with the external auditors’ statutory responsibilities and ethical
guidance, the following types of services may be assigned to the external auditors:
Further assurance services: where the external auditors’ deep knowledge of the Group’s affairs means that they may be 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 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 to tender
and decisions to award work are taken on the basis of demonstrable competence and cost effectiveness. However, the external
auditors are specifically prohibited from performing 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.
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