20645_Scapa_AR_160504

CORPORATE GOVERNANCE
To assess the effectiveness of our external
auditor, a formal performance review is
undertaken on an annual basis to identify
the adequacy of their approach to:
Resource quality – it is important that the
external auditor has achieved the right balance
of audit team resource. While they should be
providing team continuity and knowledge, they
should also be providing a fresh perspective
through new team members at all levels to
enable the current audit processes and
accounting policies to be challenged.
Effective communication – is key to
obtaining the highest quality audit service
from our external auditor and includes:
> > key audit judgements are communicated
at the earliest opportunity to promote
discussion and challenge between
themselves and management
> > informing Scapa of audit issues as they
arise, so that these can be dealt with
in a timely manner
> > in-year communication regarding good
practice, changes to reporting requirements
and accounting standards to enable Scapa
to be prepared prior to year end
> > timely provision of Audit and Risk
Committee papers to enable adequate
management review and feedback
> > quality of the reports and publications
provided by the external auditor in terms
of content, relevance and presentation
Scoping and planning – specifically
relating to the year end audit work:
> > consultation with stakeholders including
Group and local finance teams, local
warehouse teams, Group Risk &
Assurance and the Audit and Risk
Committee
> > timely provision of the external audit
strategy and timetable to stakeholders
> > transparency in the communication and
management of changes to the external
audit plan and related timings
Fees – are transparent and communicated
prior to the commencement of any work
undertaken. Where variations occur, these
are informed at the earliest opportunity
to enable dialogue and negotiation to
be undertaken.
INTERNAL AUDIT
Internal audit at Scapa is managed and
delivered by the Group Risk & Assurance
team. Against an agreed mandate, this
function performs independent internal audit
and facilitates standardised and structured
risk assessment across the Group. Specialist
internal audits are conducted by experts
(in-house and outsourced) under the
direction and management of the Head
of Group Risk & Assurance.
In line with the Group’s Internal Audit Charter,
a three-year internal audit strategy and an
annual internal audit plan are approved by
the Audit and Risk Committee each year.
These target the most significant areas of
risk to provide assurance that key controls
are effectively designed and consistently
operated. Audit reports are produced to
convey the extent of control assurance
derived from the formal testing of controls.
In providing independent good practice
guidance, the Group Risk & Assurance team
assists the business in the continuous
improvement of controls and procedures.
Half yearly summary reports are presented
by the Group Risk & Assurance team to the
Audit and Risk Committee to convey:
> > an up-to-date view of the Group’s risk profile
> > details of internal audits undertaken during
the period
> > an overall assessment of the Group’s
control environment
> > the status of management actions arising
from the risk management and internal
assurance processes
The Head of Group Risk & Assurance
is accountable to the Audit and Risk
Committee and has access to the
Committee and its Chairman at any time
during the year. As a matter of course, the
Head of Group Risk & Assurance meets with
the Chairman of the Audit and Risk
Committee independently of management.
The Group Risk & Assurance team has no
operational responsibility or authority over
any of the activities it has reviewed during the
year, nor has the team designed the control
frameworks in place. The Group Risk &
Assurance team members do not hold
shares in the Company. This ensures that
the team is sufficiently objective and
independent of the areas under review to
avoid prejudice and conflicts of interest.
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ANNUAL REPORT AND ACCOUNTS 2016 SCAPA GROUP PLC