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AUDITOR SELECTION, APPOINTMENT
AND AUDIT INDEPENDENCE
1. Selection and Appointment of External Auditor
Each year the Committee will consider whether the audit
should be tendered. In making this decision, the Committee will consider
(among other things) the performance of the auditor and the independence
of the auditor. The Committee's recommendation as to whether the
audit should be tendered, or whether the auditor should be reappointed,
will be put to the Board for their approval.
If a tender is undertaken, all work on the tender will
be undertaken by the Committee. Any subsequent recommendation for
the appointment of an external auditor will be put to the Board and
then if a change is approved it will be put forward to shareholders
for their approval.
2. Auditor Independence
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Ensure that the external auditor meets the required standards
for auditor independence.
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In carrying out its responsibilities the Committee will be cognisant
of the following.
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It is mandatory that the audit engagement partner responsible
for the audit be rotated at least every five years. At least two
years must expire before the audit engagement partner can again
be involved again in the audit of Sipa.
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Consider whether, taken as a whole, the various
relationships between Sipa and the external auditor impairs or
appears to impair
the auditor’s judgment or independence in respect of the
company.
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Review the economic importance of the company (in terms of fees
paid to the external auditor for the audit as well as fees paid
to the external auditor for the provision of non- audit services)
to the external auditor and assess whether the economic importance
of Sipa to the external auditor impairs or appears to impair the
external auditor in their judgment or independence in respect of
the company.
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Engage in active discussions with the external auditor in relation
to disclosed relationships, and their potential impact on auditor
independence.
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Monitor the number of former employees of the
external Auditor currently employed in senior positions in Sipa
and assess whether
this impairs or appears to impair the auditor’s judgment
or independence in respect of the company.
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Confirming that the independence of the audit function is maintained
by ensuring there are no unreasonable restrictions placed upon
the external auditor or internal auditor and that internal audit
reports to the Managing Director and has full and free access to
the Committee to preserve objectivity.
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Consider whether the provision of non-audit
services is compatible with maintaining the auditor’s independence.
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