20645_Scapa_AR_160504

CORPORATE GOVERNANCE CONTINUED
EXTERNAL AUDIT
Auditor independence
The Committee continues to monitor
the external auditor’s compliance with
applicable ethical guidance and guidelines
and considers the independence and
objectivity of the external auditor as part
of the Committee’s duties.The Committee
received and reviewed written confirmation
from the external auditor on all relationships
that, in their judgement, may bear on their
independence. The external auditor has also
confirmed that they consider themselves
independent within the meaning of UK
regulatory and professional requirements.
In all services purchased, the Group selects
the provider best placed to deliver the work
in terms of quality and cost. As a general
principle the external auditor is excluded from
consultancy work and other non-audit work.
However, there may be occasions when it is
appropriate to use our external auditor for
non-audit services and this will be reviewed
on an individual basis and allocated
according to merit.
The external auditor may be appointed to
provide non-audit services where it is in the
Group’s best interests to do so, provided a
number of criteria are met. These are that
the external auditor does not:
> > audit their own work
> > make management decisions
for the Group
> > create a conflict of interest
> > find themselves in the role of
an advocate for the Group
Non-audit services for up to £10,000
(which comply with the above criteria)
may be provided by the external auditor
with authorisation in advance by the
Group Finance Director.
Tendering policy and review
of auditor effectiveness
Deloitte LLP was appointed as the Group’s
external auditor in 2011 after a competitive
tendering exercise. Deloitte LLP has been
the Group’s external auditor for five financial
years and the engagement partner has
completed their five years as audit partner.
Therefore, to aid in the smooth transition of
engagement partner in 2016/17, Deloitte
have already commenced the introduction
and orientation of a new engagement partner
to the Group and the external audit team.
Following the positive outcome of a
performance and effectiveness evaluation
undertaken by the management, the Audit
and Risk Committee concluded that it was
appropriate to recommend to the Board the
reappointment of Deloitte LLP as the Group’s
external auditor for the next financial year.
All projects where forecasted expenditure
exceeded £10,000 were approved by the
Audit and Risk Committee.
M C BUZZACOTT
CHAIRMAN OF THE AUDIT AND RISK
COMMITTEE
24 MAY 2016
46
SCAPA GROUP PLC ANNUAL REPORT AND ACCOUNTS 2016