Telstra 2002 Annual Report Download - page 156

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Telstra Corporation Limited and controlled entities
Corporate Governance and Board Practices
Membership of the committee
The Audit Committee consists of three or more non-executive directors as determined by the board in its
business judgment. At least one member of the committee must have accounting or related financial
management expertise.
The members of the Audit Committee are all non-executive directors:
• John Stocker (Chairman);
•John Ralph;
• Charles Macek;
• Belinda Hutchinson; and
•Anthony Clark.
Meetings
The Audit Committee meets four times per year or more frequently as circumstances require. The quorum
for such meetings is two members of the committee. Any other board member may attend such meetings
as he or she wishes. The external auditor attends each Audit Committee meeting. The committee may ask
management and/or others to attend these meetings and provide such input and advice as required.
Relationship with the external auditor
In accordance with section 36 of the Telstra Act:
• the auditor of the Telstra group for Australian financial reporting purposes is required by law to be
the Auditor-General. The Auditor-General, in consultation with the Telstra Audit Committee and
board, subcontracts this work to an accounting firm. The incumbent is Ernst and Young who have
had the contract since fiscal 2000; and
• the Audit Committee and the board appoint the auditor for filings outside Australia.
The Auditor-General, as auditor of Telstra, owes duties to Telstra and its shareholders as a whole. The
Auditor-General also owes statutory duties as an independent officer of the Commonwealth.
The auditor appointed by the Telstra Audit Committee and board for filings outside Australia is accountable
to the board of directors, Audit Committee and shareholders.
The Audit Committee and board of directors have the ultimate authority and responsibility to select,
evaluate and, where appropriate, replace the external auditor for filings outside Australia.
The Audit Committee requires the external auditor and its subcontractor to:
• submit on a periodic basis to the Audit Committee a formal written statement delineating all
relationships between the auditor and Telstra;
• consider whether the external auditor’s provision of non-audit services to the company is compatible
with maintaining the independence of the external auditor; and
• if applicable, shall recommend that the board take appropriate action in response to the external
auditor’s report to satisfy itself of the external auditor’s independence.
Recurring processes
The Audit Committee is required to, on an annual basis:
• review its charter to determine its adequacy for current circumstances and recommend to the board
the formal adoption of the revised charter for future operations of the Audit Committee;