Tullow Oil plc Annual Report 2011 - The Group

Audit Committee report“The Committee met onfour occasions and fullydischarged its mainresponsibilitiesduring the year.”David Williams, Committee ChairmanCommittee memberDavid Williams(Chair)Memberthroughout 2011Number ofmeetings attended 4Tutu Agyare 4David Bamford 1 4Ann Grant 4Steven McTiernan 4Clare Spottiswoode To 12 May 2011 1SimonThompson 2 21 Ceased as a member of the Committee on 17 January 2012.2 Ceased as a member of the Committee on appointment as Chairmanof the Company on 1 January 2012.Main responsibilities Monitoring the integrity of the financial statementsand formal announcements relating to the Group’sfinancial performance; Reviewing significant financial reporting issues andaccounting policies and disclosures in financial reports; Reviewing the effectiveness of the Group’s internal controlprocedures and risk management systems; Considering how the Group’s internal audit requirementsshall be satisfied and making recommendations to the Board; Making recommendations to the Board on the appointmentor re-appointment of the Group’s external auditors; Overseeing the Board’s relationship with the externalauditors and, where appropriate, the selection of newexternal auditors; and Ensuring that an effective whistle-blowing procedureis in place.The Audit Committee terms of reference can be accessedvia the corporate website. The Board approved the terms ofreference in December 2011. The Committee fully dischargedthese responsibilities during the year.84GovernanceDavid Williams, who is Chairman of the Committee, is aChartered Accountant and until his retirement in 2006 wasfinance director of Bunzl plc. It is a requirement of the UKCorporate Governance Code that at least one Committeemember has recent and relevant financial experience.David Williams therefore meets this requirement.The Group’s external auditors are Deloitte LLP and theCommittee closely monitors the level of audit and non-auditservices they provide to the Group. Non-audit services arenormally limited to assignments that are closely related tothe annual audit or where the work is of such a nature that adetailed understanding of the Group is necessary. A policy forthe engagement of the external auditors to supply non-auditservices is in place to formalise these arrangements whichrequires Audit Committee approval for certain categories ofwork. This policy has been reviewed and updated in line withupdated Audit Practice Board Ethical Standards and FRCGuidance to Audit Committees, and is available on thecorporate website.A breakdown of the fees paid to the external auditors in respectof audit and non-audit work is included in note 5 to the financialstatements. In addition to processes put in place to ensuresegregation of audit and non-audit roles, Deloitte LLP arerequired as part of the assurance process in relation to theaudit, to confirm to the Committee that they have both theappropriate independence and the objectivity to allow themto continue to serve the members of the Company. Thisconfirmation was given and no matters of concern wereidentified by the Committee.The Chief Financial Officer, the Group Internal Audit Manager,the General Manager Finance, the Deputy Company Secretaryand representatives of the external auditors are invited to attendeach meeting of the Committee and participated in all of themeetings during 2011. The Chairman of the Board also attendsmeetings of the Committee by invitation and was present at allof the meetings in 2011. The external auditors have unrestrictedaccess to the Committee Chairman.During the 2011 audit process, the Audit Committee Chairmanmet with Deloitte’s audit engagement partner without thepresence of management.MeetingsIn 2011, the Audit Committee met on four occasions. Meetingsare scheduled to allow sufficient time to enable full discussionof key topics. The key work undertaken by the Committee wasas follows:Consideration and review of full-year and half-yearly results The Committee met with the external auditors as a part ofthe full-year and half-yearly accounts approval process. During this exercise the Committee considered the mostappropriate treatment and disclosure of any new orjudgemental matters identified during the audit or halfyearlyreview, as well as any recommendations orobservations made by the external auditors.Tullow Oil plc 2011 Annual Report and Accounts