TomTom 2013 Annual Report Download - page 37

valuation of goodwill and other assets, and the clarity of the rules
for disclosure, as well as the company's compliance with
accounting standards, the requirements of NYSE Euronext
Amsterdam and other corporate governance, legal and regulatory
bodies.
Business assurance
The company monitors its internal controls through a systematic
approach to risk assessment and internal audit. The Business
Assurance team assists in the independent review of the company's
risk management controls. The VP of Business Assurance leads the
department, reporting functionally to the Audit Committee and
administratively to the CFO. During 2013, the VP of Business
Assurance reported each quarter to the Audit Committee. He also
ensured open communication between himself and the chairman
of the Audit Committee during the course of the year.
The internal audit programme covers key business processes,
subsidiary office reviews, the auditing of major ICT projects before
go live and special requests. Working with management, Internal
Audit selects the areas of the business to be audited during the year.
The selection of audits is presented to the Audit Committee and
approved by them.
Members of the Audit Committee and the Management Board may
request Internal Audit to carry out an internal audit or special
consulting service at any time. During 2013, approximately 26% of
the Internal Audit workload involved such special requests by
management. This approach keeps the Internal Audit work
schedule closely aligned with the dynamic nature of our business.
Independence
The Business Assurance department maintains a high level of
independence and objectivity within its team. This is based on the
following principles:
• The Audit Committee Charter describes the purpose, authority
and responsibilities of Internal Audit;
• The VP of Business Assurance has unrestricted access to the
Supervisory Board and Audit Committee and reports regularly to
the Audit Committee, as well as maintaining a direct relationship
with the Audit Committee chairman;
• The VP of Business Assurance meets at least once annually with
the Audit Committee without the Management Board being
present;
• Members of the Internal Audit department are qualified
professionals, who uphold the ethical guidelines covering
independence laid down by the professional bodies that govern
registered accountants and internal auditors; and
• The internal auditor's role is to provide assurance and advice to
management, who are ultimately accountable for the design
and effective operation of the internal control and risk systems.
External auditor
The Audit Committee agrees the compensation of the external
auditor and recommends the appointment of an external auditor
to the Supervisory Board. Each new appointment is subject to the
approval of the company's shareholders at the Annual General
Meeting.
Deloitte Accountants BV has acted as external auditor for the
company since 2004. The Audit Committee recommends that the
Supervisory Board re-appoint Deloitte for the 2014 financial year-
end audit, subject to the approval of shareholders at the Annual
General Meeting. Deloitte have expressed their willingness to
continue to provide this service to the company during 2014.
Resolutions proposing their re-appointment will be submitted to
the forthcoming Annual General Meeting.
During 2013, the external auditor attended each of the four Audit
Committee meetings to address agenda items relating to the
external financial reporting and related press releases. The Audit
Committee and the external auditor also met separately, without
the Management Board being present, in order to facilitate free and
open discussions.
The Audit Committee reviewed the independence of the external
auditor, taking into account qualitative and quantitative factors.
The committee concluded that the external auditor has sufficient
objectivity and independence to perform the external audit
function. Below a summary is provided of services performed by
Deloitte Accountants BV, its network affiliates and the fees earned.
Breakdown of fees by type of service
(€ in thousands) 2013 % of
total
2012 % of
total
Audit - group 445 48% 440 41%
Audit - statutory 141 15% 191 18%
Audit-related services160 6% 60 6%
Tax compliance2289 31% 380 35%
Total 935 100% 1,071 100%
1During 2013, audit-related services consisted of quarterly analytical procedures.
2Tax compliance comprises local tax compliance services, including local tax filings and HR-related
compliance services. These services are based on a contract that existed prior to 31 December 2012.
Following the mandatory audit rotation requirement in the
Netherlands, TomTom will select a new auditor for 2015.
Supervisory Board Report / Continued
ANNUAL REPORT AND ACCOUNTS 2013 / 37