- Monitors the integrity of the financial statements, including the review of significant financial reporting issues and judgements alongside the findings of our external auditor
- Advises the Board on the effectiveness of the fair, balanced and understandable review of the Annual Report
- Oversees the relationship with the external auditor, external audit process, nature and scope of the external audit, including their appointment, effectiveness, independence and fees
- Monitors and reviews the effectiveness of corporate audit, ensuring co-ordination with the activities of our external auditor
- Reviews the effectiveness of the Group’s systems for internal financial control, financial reporting and risk management
MAIN ACTIVITIES OF THE AUDIT COMMITTEE DURING THE YEAR
During the course of the year, the Audit Committee met with the external auditor and management as part of the Fiscal 2016 annual and quarterly reporting approval process. We reviewed the draft financial statements and considered a number of supporting papers, including information presented by management on significant accounting judgements to ensure all issues raised have been properly dealt with, key points of disclosure and presentation to ensure adequacy, clarity and completeness, documentation prepared to support the going concern statement given on page 70 and external audit reports were reviewed.
Key matters considered include the recognition and disclosure of the Tianjin incident and the measurement and disclosure of legal claims for and against the Group.
We reviewed the effectiveness of financial reporting, internal control over financial reporting and risk management procedures within the Group (which extends to all trade investments and joint venture companies), with particular regard given to compliance with the provisions of section 404 of the Sarbanes-Oxley Act and other relevant regulations.
The review also considered any potential material weaknesses or significant deficiencies in the design or operation of the Group’s internal control over financial reporting which are reasonably likely to adversely affect the Group’s ability to record, process and report financial data and to receive reports from the external and internal auditors with respect to these matters.
We reviewed the significant audit issues with the external auditor and how they have been addressed in the financial statements.
We also evaluated the external auditor by reviewing the firm’s independence, its internal quality control procedures, any material issues raised by the most recent quality control and peer review of the audit firms. This included the findings of any enquiry or investigation carried out by government or professional bodies with respect to one or more independent audits carried out by our external auditor within the last five years.
During the year we regularly reviewed the adequacy of the corporate audit function, including the Corporate Audit charter, the structure of the Corporate Audit department, approval of the audit plan and its execution, staffing and seniority of the official heading the department, reporting structure, budget, coverage and the frequency of corporate audits.
We have also met with Corporate Audit and the external auditor on a one-to-one basis twice during the year. This forms an important part of our consideration and control ensuring that they have an open and direct forum with the Audit Committee.