STRATEGIC REPORT
FINANCIAL STATEMENTS
Governance
INTERNAL AUDIT Group Internal Audit is an internal function that provides independent and objective assurance to the Committee that the Group’s risk management, governance and internal control processes are operating effectively. The Committee considers and approves the Internal Audit plan annually, which is constructed using a risk-based approach taking account of risk assessments, input from senior management and previous external and internal audit findings. Reports from the Director of Group Internal Audit include updates on audit activities, progress of the Internal Audit plan, the results of any unsatisfactory audits, and the action plans to address these areas. Monitoring and reviewing the scope, extent and effectiveness of the activity of the Group Internal Audit team is regularly reviewed by the Committee. In 2022, the Committee: • continued to oversee the Internal Audit function with the Director of Group Internal Audit reporting directly to the Committee Chair; • received an independent view of the effectiveness of the Internal Control Framework of the Group; • oversaw the engagement of EY to work with the Internal Audit team on the combined internal audit assurance work; • reviewed and approved the rolling 12 month internal audit plan ensuring the alignment to the key risks of the business; • reviewed results from audits performed, including any unsatisfactory audit findings and related actions plans; • reviewed open audit actions and monitored progress against them; • reviewed and approved the Internal Audit Data Analytics Strategy; • conducted an assessment of the Internal Audit function; • reviewed and approved the Internal Audit Charter, which is available to view on the Group’s website; and • reviewed and approved the Internal Audit calendar for 2022. The Committee regularly considers the resource requirements of the Internal Audit team and oversees steps taken and any associated contingency plans to ensure it remains adequately resourced. The Committee remains satisfied that it has the appropriate resources and the relevant skills and experience to fulfil its role effectively. The Committee held private discussions with the Director of Group Internal Audit during the year. The Committee Chair also meets with the Director of Group Internal Audit regularly outside the formal Committee process and is accountable for the setting and appraisal of his objectives and performance with input from the Group Chief Executive Officer. During the year, the Committee Chair, in conjunction with the Director of Group Internal Audit, set key actions to continue to develop the Group Internal Audit function regarding its effectiveness, impact and influence, and the Committee received updates on the status of these actions. An External Quality Assessment (“EQA”) of Internal Audit is carried out every three to five years, with the last one being undertaken at the end of 2019. The EQA was completed by an independent firm which assessed the function against the Chartered Institute of Internal Auditors’ standards with an overall rating of Generally Conforms, which is the highest rating that can be achieved. To provide ongoing assurance to senior management and the Committee, Group Internal Audit has developed its control framework to undertake regular external assessments, which are supplementary to EQA. The next EQA is scheduled to take place in 2023.
WHISTLEBLOWING The Group has a whistleblowing framework that is designed to enable colleagues to raise concerns confidentially about conduct they consider contrary to the Group’s values such as unsafe or unethical practices. Any concerns can be reported directly to the Group Company Secretary or by contacting an external confidential dedicated telephone hotline or via a secure web portal. The concern can be given anonymously. The Committee receives regular updates on any concerns identified and, where appropriate, what action has been taken to address the issues raised. The Chair of the Committee is the Group’s whistleblowing champion and is responsible for ensuring and overseeing the integrity, independence, autonomy and effectiveness of the Group’s policies and procedures on whistleblowing including the Whistleblowing policy which is reviewed annually.
On behalf of the Group Audit Committee
PAUL BISHOP Chair, Group Audit Committee 6 March 2023
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