Audit Independence Policy 1.0
Purpose
This policy provides guidance on the provision of external audit services by any person engaged to perform external audit services in relation to the Mighty River Power Group (the external auditor) on behalf of the Auditor-General. The objective of this policy is to provide guidance on the provision of external audit services to ensure that the independence of the external auditor is maintained. Mighty River Power will ensure external auditor independence is maintained in line with this policy in order that its reputation for reliable and credible financial reporting is protected. Responsibility for administering this policy rests with the Risk Assurance and Audit Committee (the Committee).
2.0
Terms of Engagement
The external auditor will confirm to the Committee annually that he/she and his/her firm are in compliance with professional standards and ethical guidelines of the Institute of Chartered Accountants of New Zealand. Rotation of the senior audit partner is required every five years with a mandatory two year stand down period to be completed before that partner’s next engagement with the Company. Former Mighty River Power employees will not be engaged in an external audit role for the Company within two years of leaving the Company. Former audit partners or audit managers will not be employed by the Company without prior approval of the Committee. The prior approval of the Chief Financial Officer is required before any non-audit services are provided by the external auditor’s firm. The fees for such services should not exceed half of the fees for core audit services in any financial year, unless approved by the Chair of the Risk Assurance and Audit Committee.
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performing any function of management, or being responsible for making management decisions; staffing of temporary roles; producing or preparing financial information or financial statements such that the firm could be perceived as auditing its own work; providing valuation services where such valuation is included in audited financial information; providing actuarial services; advising on taxation planning and strategy matters; providing broker, dealer, investment advisory or investment banking services; designing or implementing financial information systems and processes within the Company; and involvement in the Company’s Internal Audit Programme.
4.0
Non-audit services which may be provided by the External Auditor
The external auditor’s firm may provide non-audit services where these are approved by the Committee as being appropriate. Examples of these services include: – – – – –
advising on accounting policy, appropriate accounting standards and their interpretation; advising on the interpretation and application of taxation policies; reviewing compliance with taxation requirements; providing due diligence services; and providing accounting and technical training.
5.0
Review of Audit Independence Policy
This policy has been approved by the Committee and the Board and will be reviewed as required to ensure that it remains consistent with the Committee’s objectives and responsibilities.
The external auditor will monitor his/her firm’s independence and confirm to the Committee annually that it has remained independent during the previous twelve months.
3.0
Non-audit services which cannot be performed by the External Auditors
The external auditor’s firm will not be used for any purpose which could reasonably be regarded as compromising the independence of the external auditor. This includes but is not restricted to the following:
MIGHTY RIVER POWER AUDIT INDEPENDENCE POLICY REVIEWED BY BOARD OF DIRECTORS: 7 DECEMBER 2015
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