Peachtree 2012 Annual Report Download - page 58

External audit
The Audit Committee is responsible for the development, implementation
and monitoring of the Group’s policy on external audit. The policy assigns
oversight responsibility for monitoring the independence, objectivity and
compliance with ethical and regulatory requirements to the Audit Committee
and day-to-day responsibility to the Chief Financial Ofcer.
To assess the effectiveness of the external auditors, the Audit
Committee reviewed:
• the external auditors’ fullment of the agreed audit plan and any variations;
• the robustness and perceptiveness of the auditors in their handling of key
accounting and audit judgements; and
• the content of the external auditors’ reports.
The scope, fee, performance and independence of the external auditor are
considered annually by the Audit Committee. The Committee is condent that
the objectivity and independence of the auditors is not impaired in any way
by reason of their non-audit work or other factors and has adopted controls
to ensure that this independence is not compromised. These controls include
the continued monitoring of the independence and effectiveness of the
audit process.
Audit partners are rotated every ve years (with the most recent change taking
place in the year to 30 September 2010). A formal statement of independence
from the external auditors is received each year. In addition, the Audit
Committee has adopted a specic policy on auditor independence, drawing
together the various existing Group policies in this area. This policy requires
that there is full consideration of independence issues before any appointment
of an employee or former employee of the auditor to a position with the Group.
It expressly states that the Group will not engage the auditors to undertake any
work that could threaten the independence of the auditors and prohibits the
Group from engaging the auditors to undertake certain types of service, such
as, amongst others, human resources, legal and actuarial services.
The Committee believes that the Company receives particular benet from tax
advice provided by its auditors, given their wide and detailed knowledge of the
Group and its international nature. Executive management has the discretion,
(subject to certain nancial limitations), to obtain taxation services from the
auditors without prior reference to the Audit Committee, subject to informing
the Audit Committee regularly of the amount and nature of fees for such
services. Where these nancial limitations are exceeded, the approval of the
Audit Committee is required for such appointment. The Group also receives
taxation advice from other large accountancy practices as and when appropriate.
Non-audit services (other than in relation to taxation) may be undertaken by
the external auditors, subject to the rules referred to above, with all projects
expected to cost in excess of an amount set by the Audit Committee being
approved in advance either by the Chairman of the Audit Committee or by the
full Audit Committee, depending on the expected cost of the project. The
Chairman of the Audit Committee may require that such projects are put out
to tender to a number of rms. In the year under review, all non-audit services
provided by the external auditors were in accordance with these rules. It is the
policy of the Committee to require that acquisition due diligence be undertaken
by rms other than the auditors unless conicts of interest for comparable
rms make this impractical. At each meeting, the Committee receives a report
from the external auditors providing an update on the fees for non-audit
services incurred since the previous meeting. Where the cumulative non-audit
fees in the year are anticipated to exceed a certain sum, the prior approval of
the Audit Committee is required.
In the year to 30 September 2012 the audit fee was £2.0m.
The Company’s auditors, PricewaterhouseCoopers LLP, also perform
non-audit services for the Group (principally tax advice) over and above the
external audit. The fees in relation to these services were £0.8m, of which
£0.6m was attributable to tax compliance services, £0.1m to tax advisory
services and £0.1m to other services. Further details of fees paid to auditors
are set out on page 90.
There are no contractual restrictions on the choice of the Committee as to
external audit and, having considered the services provided by the current
external auditors, their independence and knowledge of the Group and the
factors referred to above, the Committee has determined to recommend to
the Board the reappointment of the auditors at the Annual General Meeting in
March 2013. In reaching this decision, the Committee also had regard to the
likelihood of a withdrawal of the auditor from the market. The current external
auditors were appointed to that role in 1988. The Committee has determined
that, providing the work of the external auditors remains entirely satisfactory,
formal consideration of a tender process will be undertaken every ve years,
around the time that the audit partner is normally changed.
The most recent change of audit partner occurred in the year to 30 September
2010 and, therefore, formal consideration of an audit tender process took place
during the course of that year.
The Committee gave full consideration to the performance and independence
of the auditors and after this review considered that a tender process was not
required given the processes already in place to ensure independence and the
performance to date of the current auditors.
Corporate governance report continued
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