Skip to content Skip to footer

Loading Results

Terms of Reference of the Audit Committee

15 Jul 2020

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

1. Delegated Authority

The Audit Committee (“the Committee”) receives delegated authority from the Supervisory Board (“SB”) of PricewaterhouseCoopers LLP. The primary purpose of the Committee is to provide assistance to the SB in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting and internal control functions of the firm.

The Committee 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.

The Committee 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. Appointment and Membership

The Chair of the Committee shall be nominated by the Chair of the SB.

The Chair of the SB also selects for nomination four members from the SB population. At least one member of the Committee is required to be the Chair of the Risk Committee (“RC”).
SB members who are not members of the Committee may attend meetings where relevant after first liaising with the Committee Chair.

In order to perform their role effectively, each Committee member should obtain an understanding of the detailed responsibilities of Committee membership as well as the PwC business, operations, risks and regulatory environment. The members of the Committee are:

  • Kenny Wilson, Chair, Partner and SB member
  • Kate Wolstenholme, Chair of Risk Committee, Partner and SB member
  • David Kenmir, Partner and SB member
  • Andy Key, Partner and SB member

The secretary to the Committee is Lucy Jones.

3. Attendance of non-members at meetings

Standing attendees shall be the Head of Internal Audit, Finance Partner, External Audit representative and Managing Partner and Chief Operating Officer or their delegate subject to agreement in advance of the meeting with the Chair of the Committee.

Other members of management may also be invited to attend meetings.

4. Meetings

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

The Committee keeps minutes of its proceedings and makes these available to the SB, RC, Management Board (“MB”) and the Public Interest Body (“PIB”).

The quorum shall be four members of the SB for any meeting at which the Committee’s delegated powers are to be exercised. In the event of difficulty in achieving a quorum, SB members who are not members of the Committee may be co-opted as members for individual meetings, provided the majority of the quorum are full members of the Committee.

5. Responsibilities of the Committee

A. External audit

  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;
  2. to assess annually the effectiveness of the audit process;
  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;
  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;
  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;
  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;
  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
  8. to review the external auditor’s management letter and management’s response.

B. Internal controls and internal audit

  1. to review the effectiveness of the firm’s internal control framework;
  2. to monitor and review the effectiveness of the internal audit function including:
    i. to consider with management the appointment of the Head of Internal Audit

    ii. to annually approve the Internal Audit charter

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

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

    v. to review on a quarterly basis the results of the Internal Audit reviews performed

    vi. to monitor the satisfactory performance of Internal Audit
  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.

C. Annual financial statements

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

    i. critical accounting policies and practices, and any changes in them

    ii. decisions requiring a major element of judgement

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

    iv. the clarity of disclosures

    v. significant adjustments resulting from the audit

    vi. the calculation of partners’ distributable profit

    vii. the going concern assumption

    viii. compliance with accounting standards and related guidance

    ix. compliance with other legal requirements
  2. to review management’s statement on internal control systems prior to endorsement by the Executive Board (“EB”) (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;
  3. to review tax compliance and tax planning initiatives of the firm;
  4. to review the letter of representation prior to management sign off;
  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;
  6. to review the firm’s Annual Transparency Report; and
  7. to review the firm’s Annual Sustainability Report.

D. Other matters

  1. to perform other oversight functions, as requested by the SB.

Approved: 15th July 2020

Contact us

UK Secretariat

London, PwC United Kingdom

Follow us