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Terms of Reference of the Audit Committee (the “AC”), a committee of the Supervisory Board (the “SB”) of PricewaterhouseCoopers LLP (the “Firm”)

21 Feb 2022

These Terms of Reference should be read in conjunction with the Members’ Agreement. In the event of any inconsistency or contradiction, the Members’ Agreement shall prevail.

1. Purpose and Authority

1.1 The AC has delegated authority from the SB. The primary purpose of the Committee is to provide assistance to the SB in fulfilling its role and responsibilities as set out in the Members’ Agreement with respect to matters involving the accounting, auditing, financial reporting and internal control functions of the Firm.

1.2 The AC may investigate any activity (within these Terms of Reference and within its scope of responsibilities), to seek any information it requires and to ensure the attendance of management representatives at meetings as appropriate.

1.3 The AC has the authority to obtain outside legal or independent professional advice. The advisers may attend meetings as necessary and the cost of the advisers shall be borne by the Firm.

2. Membership

2.1 The membership of the AC is as follows:

  • Dave Walters, Chair (Audit Partner and SB member)

  • Simon Ager (Tax Partner and SB member)

  • Glen Babcock (Deals Partner and SB member)

  • Andy Key (Consulting Partner and SB member)

  • Kenny Wilson (Audit Partner and SB member)

2.2 The members of the AC are nominated by the Chair of the SB for a term not exceeding two years. The Chair of the SB may nominate members of the AC to serve additional terms as AC members. 

2.3 Only members of the AC have the right to attend AC meetings. Other individuals may be invited to attend for part or all of any AC meeting, as and when appropriate. Regular attendees expected include the Head of Internal Audit, Finance Partner, External Audit representatives, and the Chief Operating Officer, or their delegate, subject to agreement in advance of the meeting with the Chair. 

3. Chair

3.1 The Chair of the AC is nominated by the Chair of the SB for a term not exceeding two years, and approved by the SB. In the absence of the Chair at any AC meeting, the members present shall appoint a member in attendance as Chair of the meeting.

4. Secretary

4.1 The Secretary to the AC is Kelly Gabriel, a member of the Board Secretariat. In the absence of the Secretary, another member of the Board Secretariat of the Firm may act as Secretary of the AC.

4.2 The Secretary will ensure that the AC receives information and papers in a timely manner to enable full and proper consideration to be given to matters, and will be responsible for maintaining accurate records of meetings.

5. Quorum

5.1 The quorum shall be four members of the AC for any meeting at which the AC’s delegated powers are to be exercised.

5.2 In the event that an AC meeting may be inquorate, an SB member who is not already a member of the AC may, at the Chair’s discretion, be appointed at the start of the meeting to form part of the meeting quorum and to participate in any decision making at that meeting, provided the majority of the quorum are AC members.

6. Decisions of the AC

6.1 A decision of the AC taken by vote shall require a Simple Majority. The Chair will have the casting vote.

7. Frequency of Meetings

7.1 The Chair of the AC determines a rolling programme of ordinary meetings, which must provide for at least four ordinary meetings in each calendar year. Additional meetings can be called at the request of the Chair, the Head of Internal Audit, or the External Auditor.

8. Notice of Meetings

8.1 Meetings of the AC will be called by the Secretary at the request of the Chair, by any of the AC members, or in accordance with para. 7.1, with notice of such meetings being provided at the earliest opportunity.

8.2 Unless otherwise agreed, notice of each AC meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each AC member in a timely manner. Supporting papers shall be sent to the AC members and other attendees, as appropriate, at the same time.

9. Minutes of AC Meetings

9.1 The Secretary will minute the proceedings and decisions of all AC meetings, including recording the names of those present and in attendance.  

9.2 Draft minutes of AC meetings will be circulated first to the Chair, and then to all other AC members for review. 

9.3 Once approved, minutes will be shared with the Firm’s SB, unless it would be inappropriate to do so.

10. Duties, Powers and Responsibilities

10.1 External Audit

10.1.1 To assess annually the qualification, expertise and resources, and independence of the external auditor, taking account of relevant Ethical Standards and ensuring that key partners are rotated at appropriate intervals;

10.1.2 To assess annually the effectiveness of the audit process;

10.1.3 To review with management the audit fee and audit engagement letter and to ensure that the provision of non‑audit services does not impair the external auditor’s independence or objectivity;

10.1.4 To develop and implement a policy on the supply of non‑audit services by the external auditor and to agree with management a policy on the employment of former employees of the firm’s external auditor and monitor its implementation;

10.1.5 To discuss with the external auditor, before the audit commences, the nature and scope of the audit and to review the auditor’s quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements;

10.1.6 To make appropriate recommendations, if considered necessary, to the designated members regarding the continuation of the external auditor, to oversee the selection process for new auditors and, if an auditor resigns, to investigate the issues leading to this and decide whether any action is required;

10.1.7 To consider the need to include the risk of withdrawal of the external auditor from the market in the Committee’s risk assessment process; and

10.1.8 To review the external auditor’s management letter and management’s response.

10.2 Internal controls and internal audit

10.2.1 To review the effectiveness of the firm’s internal control framework;

10.2.2 To monitor and review the effectiveness of the internal audit function including:

10.2.2.1 to consider with management the appointment of the Head of Internal Audit;

10.2.2.2 to annually approve the Internal Audit charter;

10.2.2.3 to seek assurance as it may deem appropriate that the function is independent, adequately resourced and has appropriate standing within the firm;

10.2.2.4 to review, challenge and approve the internal audit plan and budget annually with consideration for the firm’s risk profile;

10.2.2.5 to review on a quarterly basis the results of the Internal Audit reviews performed; and

10.2.2.6 to monitor the satisfactory performance of Internal Audit.

10.2.3 To consider management’s response to any recommendations made by the external auditor or internal audit and review with internal audit and the external auditor any fraudulent or illegal acts, deficiencies in internal control or other similar issue, including reviewing the results of management’s investigation and follow up of any fraudulent acts.

10.3 Annual financial statements

10.3.1 To review, and challenge where necessary, the actions and judgements of management in relation to the annual financial statements, paying particular attention to:

10.3.1.1 critical accounting policies and practices, and any changes in them;

10.3.1.2 decisions requiring a major element of judgment;

10.3.1.3 the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;

10.3.1.4 the clarity of disclosures;

10.3.1.5 significant adjustments resulting from the audit;

10.3.1.6 the calculation of partners’ distributable profit;

10.3.1.7 the going concern assumption;

10.3.1.8 compliance with accounting standards and related guidance; and

10.3.1.9 compliance with other legal requirements.

10.3.2 To review management’s statement on internal control systems prior to endorsement by the Executive Board (under delegated authority from the MB), the effectiveness of the firm’s internal control systems and procedures for compliance and whether management has discharged its duty to have an effective internal control system;

10.3.3 To review tax compliance and tax planning initiatives of the firm;

10.3.4 To review the letter of representation prior to management sign off; 

10.3.5 To review and to provide advice on whether the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary to assess the company’s performance, business model and strategy;

10.3.6 To review the firm’s Annual Transparency Report; and

10.3.7 To review the firm’s Annual Sustainability Report.

10.4. Other matters

10.4.1 To perform other oversight functions, as requested by the SB.


Approved by the Supervisory Board on 15 February 2022.

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