Experian 2015 Annual Report Download - page 77

Committee’s key roles
and responsibilities
• Monitoring the integrity of the financial
statements and reviewing significant
financial reporting judgments
contained in them.
• Reviewing internal financial controls
and the Group’s internal control and
risk management systems.
• Reviewing the effectiveness of the audit
process and the independence and
objectivity of the external auditor.
• Monitoring and reviewing the effectiveness
of the internal audit function.
• Developing and implementing policy on
engaging the external auditor to supply
non-audit services, taking into account
relevant guidance.
• Approving the external auditor’s
remuneration and terms of engagement,
and making recommendations about
their re-appointment.
Committee activities
The Committee’s key activities during the
year ended 31 March 2015 included:
• Reviewing the 2014 preliminary and 2015
half-year results announcements and
the Annual Report 2014; impairment
papers, prepared in accordance
with IAS 36; and papers supporting
the preparation of relevant financial
statements on a going concern basis.
For more information on the matters
considered in relation to the going
concern assessment, please see note 2
to the Group financial statements.
• Discussing and concluding on the
2015 audit plan with the external
auditor. The plan included the external
auditor’s response to developments
in the business during the year,
developments in the audit process, the
risk assessment of the Group and the
scope and coverage of the audit.
• Considering an update from the
external auditor on the audit process,
namely details of the audit’s status,
key matters arising from the audit
and assessments of management’s
judgments on them, reviewing the
content of the independence letter and
the management representation letter,
as well as engagement terms.
• Reviewing and discussing an update
from the Head of Group Internal Audit at
each Committee meeting. The Committee
received details of the audit strategy,
reviewed and approved the annual
internal audit plan and, in September
2014, reviewed the conclusions of an
external evaluation of internal audit.
• Reviewing a variety of reports on risk,
including updates on risk management,
material litigation, information security,
compliance and social media.
• Reviewing fraud and confidential
helpline updates, in September 2014
and March 2015.
• Reviewing the effectiveness of the Group’s
system of risk management and internal
control, including financial, operational,
compliance and risk management.
• Debating and approving the Group’s
treasury policy.
• Approving the Committee’s annual
meeting schedule and reviewing the
Committee’s terms of reference and
recommending some changes to the
Board for approval.
• Reviewing the Annual Report 2014
to ensure it was fair, balanced
and understandable and provided
information necessary to assess
performance, business model and
strategy. See further details later in
this section.
• Discussing regular updates on the
European Commission, UK Competition
& Markets Authority and the FRC’s
activity regarding changes to the audit
market, and considering what the Group
should do in terms of tendering the
external audit.
• Reviewing, discussing and agreeing
the approach to the September
2014 updates to the UK Corporate
Governance Code, specifically in relation
to monitoring risk management and
control systems, assessing the Group’s
prospects and assessing principal
risks. The Group’s position in relation
to the changes, and any enhancements
required, were discussed.
External auditor
Tenure and tendering
PricewaterhouseCoopers LLP have been
the Company’s auditor since the Group
was demerged from the former GUS plc
in October 2006. The next rotation of lead
audit engagement partner is scheduled to
take place following the conclusion of the
audit for the year ended 31 March 2016.
There are currently no contractual
obligations restricting the Company’s
choice of external auditor.
In recent years, there has been much
activity within the European Commission,
the UK Competition & Markets Authority
and the FRC regarding changes to the
audit market. The Audit Committee has
received a number of briefings from
management on the changes, including
considerations around audit tendering.
In March 2015, the Audit Committee
concluded that the provision of external
audit services should be tendered during
the year ended 31 March 2016, with the
appointed external auditor to be in place
to conduct the audit for the year ended
31 March 2017. This will ensure:
• good corporate governance;
• that the external auditor’s services
remain of the highest quality; and
• compliance with the UK Corporate
Governance Code’s recommendation
that the external audit contract is
tendered at least every ten years.
The Audit Committee also agreed the
tender process, which has commenced,
and the result of the tender will be
disclosed in due course.
Effectiveness, independence
and re-appointment
As part of assessing the effectiveness of the
audit process, the Audit Committee reviews
the annual audit plan each September. Then,
in March and April/May, it receives detailed
updates on the audit’s progress, which include
details of the external auditor’s actions, such as
the audit procedures undertaken, the audit’s
coverage of revenue and EBIT, the locations
visited and the status of any significant findings.
These updates give the Committee an
insight into the audit process.
Finally, at the September meeting, the
Committee receives an evaluation report on
the external auditor. This year, the evaluation
was done by issuing tailored questionnaires
to the non-executive directors, executive
directors, senior finance leadership and
senior governance leadership. These
included questions on the quality of the
audit process, in terms of its coverage,
the quality of delivery and the quality of
the external audit team. The Committee
concluded, based on this feedback and
information it obtained during the course
of its other work, that the external auditor
was performing effectively. As part of the
evaluation, the Committee also reviewed the
FRC’s Guidance on Audit Committees, and
concluded that the Group and the auditor
had complied with the guidance.
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Governance •Corporate governance report