To maintain the highest standards of corporate governance in relation to auditor independence, Net Balance Management Group has decided to implement a policy covering non-audit work that may be undertaken by an external auditor. The purpose of the limitations are to ensure that at no time will Net Balance Management Group, in our capacity as an external auditor, perform non-audit work which may impair our independence.
Net Balance Management Group, as an external auditor for a client will not perform work which would generally be perceived to be in conflict with its role as auditor. This would include work that will inevitably be audited or relied upon as part of an audit process. Examples are:
- Acting in a managerial, decision making or monitoring capacity;
- Designing or implementing large scale data systems;
- Collecting, collating and analysing performance data and/or sustainability report preparation;
- Internal audit work.
There is also a range of work that is considered to complement the audit role, which is clearly not a conflict-of-interest. Examples are:
- Provision of advice on assurance standards and assurance issues;
- Systems audits and general advice on systems development;
- Environmental, social and supply-chain audits; and
- Advisory work outside the ambit of the sustainability report that does not impair auditor objectivity or result in auditing own work.
Such additional work should be declared in assurance statements and reports.
As a guide, it is envisaged that the value of non-audit services provided by the auditor would not be materially more than the value of the audit work.
Reporting by Net Balance Management Group acting as the external auditor will be undertaken to the Audit/Governance Committee or another management representative or committee as determined by the client Board when commissioned.
At the Audit/Governance Committee meetings held to discuss the half year and year-end reports, the auditor will provide papers detailing:
- Audit results, status on progress against recommendations from previous year’s audit, and any new recommendations.
- Any peer norms, policy objectives and material sustainability issues as well as changes to ownership structure that may have an impact on audit scope.
- All material written correspondence between the auditor and management, such as any management letter.
- All work undertaken by Net Balance Management Group for the client or its subsidiaries including total fees.
- Our compliance with our own internal policies on auditor independence in relation to all dealing with the client.
The relationship between the auditor and the client, including their appointment, termination and remuneration, is overseen by the Client’s Board on the basis of advice from the Audit/Governance Committee or another management representative or committee as determined by the Client’s Board when commissioned.
In the event of a dispute between management and the auditor in relation to accounting policy or reporting, the client Board, on the advice of the Audit/Governance Committee, should decide the company’s position. The Board of Net Balance Management Group would hold a similar responsibility on behalf of the lead auditor.
Lead auditors of Net Balance Management Group and staff who have worked on a client audit in either the current or the preceding year, must not be hired by the client into any role which is in a position which could exercise influence over the contents of the sustainability statements, or anyone who prepares them. The lead auditor and the project manager must not perform more than five consecutive years’ audits at Net Balance Management Group. Independence would be achieved by changing partners as well as audit teams including project managers. At least every five years, we expect that the value and quality of our audit services be reviewed by the client and, if appropriate, the client will consider testing the audit services against the market. |
