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Membership and meetings
The Audit Committee meets a minimum of four times a year. There were seven meetings during 2005. It comprises three Authority members, currently Paddy Marron, Emer Finnan and Patricia King, all of whom are considered independent. It is chaired by Paddy Marron, who also served as Chairman of the Audit Committee for the 14th Authority. Both Paddy Marron and Emer Finnan are chartered accountants and have recent relevant financial experience.
The Director-General, Chief Financial Officer and Head of Internal Audit normally attend meetings of the committee, while the external auditors attend as required. Both the Head of Internal Audit and the external auditors have full and unrestricted direct access to the committee Chairman at all times. In addition, the Audit Committee has a discussion with external and internal auditors at least once a year, without executive management present, to ensure that there are no outstanding issues of concern.
Responsibilities
The Audit Committee is responsible for:
- Selecting and appointing the external auditors, approving their terms of reference and fees and determining with the external auditors the nature and scope of the audit work;
- Reviewing each year the performance, independence and objectivity of the external auditors. In doing so, the committee makes appropriate enquiries of management and internal audit;
- Monitoring and reviewing the resources, scope and effectiveness of internal audit (including approving the appointment or removal of the Head of Internal Audit) and agreeing the internal audit programme for the forthcoming year;
- Reviewing the procedures for handling allegations from ‘whistle blowers’;
- Reviewing reports from both management and internal audit on the effectiveness of systems of internal control. This includes considering all internal audit reports, management’s response to any recommendations and monitoring the progress of any required actions. The Head of Internal Audit presents a report at each Audit Committee meeting, summarising work completed since the previous meeting and the findings, together with the areas of focus in the forthcoming period; and
- Reviewing, prior to formal submission to the Authority, the Group’s annual financial statements and, in particular:
− any significant issues arising from the external audit;
− the accounting policies;
− any issues requiring a significant element of judgement;
− the clarity of disclosures;
− compliance with applicable accounting and legal standards; and
− the statements on internal control.
The detailed terms of reference of the Audit Committee are available on the RTÉ website.
Independence and objectivity of the external auditors
The Audit Committee reviews the independence and objectivity of the external auditors, including:
- Seeking confirmation that the external auditors are, in their professional judgement, independent of the Group;
- Obtaining from the external auditors an account of all relationships between the auditors and the Group;
- Monitoring the number of former employees of the external auditors currently employed in senior positions in the Group and assessing whether these appointments impair, or appear to impair, the auditors’ judgement or independence;
- Considering whether, taken as whole, the various relationships between the Group and the external auditors impair, or appear to impair, the auditors’ judgement or independence; and
- Reviewing the economic importance of the Group to the external auditors and assessing whether that importance impairs, or appears to impair, the external auditors’ judgement or independence.
The external auditors, KPMG, have confirmed to the Audit Committee that they continue to operate procedures to safeguard against the possibility that their objectivity and independence could be compromised. This includes the use of independent concurring partners, use of a technical review board (where appropriate) and annual independence confirmations by all staff. The external auditors report to the Audit Committee on matters including independence and non-audit fees on an annual basis. In addition, the role of the audit partner is rotated on a periodic basis.
Provision of services by the external auditors
The level of non audit-related services provided by the external auditors and the associated fees is considered annually by the Audit Committee in the context of the external auditors’ independence as part of the Audit Committee’s review of the adequacy and objectivity of the external audit process. Details of the nature of non-audit services obtained from KPMG during the year and the related fees are set out in note 7 to the financial statements.
On behalf of the Authority
Paddy Marron Chairman of the Audit Committee
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