ANNUAL REPORT AND FINANCIAL STATEMENTS 2011 | 33
The Company does not impose an automatic ban on the Group’s auditor undertaking non-audit work. The Group’s aim is always to have any non-audit work involving accountancy firms carried out in a manner that affords value for money while taking into account relevant ethical guidance. The firm must not be in a position of conflict in respect of the work in question and must have the skill, competence and integrity to carry out the work in the best interests of the Group.
The auditor of the Company is permitted to perform non-audit work in areas where, in the opinion of the Audit, Risk & Compliance Committee, it is appropriate for it to do so and there are no actual or perceived independence issues.
The Chairman of the Audit, Risk & Compliance Committee is authorised to approve the use of the auditor for non-audit work provided that the cost does not exceed £50,000 and the aggregate value does not exceed the audit fee for the financial year in question. In other circumstances, the approval of the Audit, Risk & Compliance Committee is required.
The performance, independence, competence and cost of the auditor are reviewed annually by the Audit, Risk & Compliance Committee. When the Committee considers it appropriate, the provision of audit services will be formally market-tested through a tender process involving those audit firms judged competent to meet the needs of the Group. The frequency of this market-testing will depend on the views of the Audit, Risk & Compliance Committee, on the needs of the Group and prevailing leading practice.
During the year a number of accountancy firms, all of whom are independent of KPMG, the external auditor, provided non-audit related services to the Group. Details of fees paid to these firms during 2011 are disclosed in note 4(c) on page 58 of the Consolidated Financial Statements.
Future developments The Board believes that the controls in place during 2011 have been appropriate to the needs of the Group. Nevertheless, it is committed to the highest standards of governance and business conduct and will ensure that those controls continue to develop in line with the requirements of the FSA and leading practice.
By order of the Board,
WMarrack Tonkin, FCCA Secretary 80 George Street Edinburgh EH2 3BU
23 March 2012
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