(Extracted from Annual Report 2016)
The Audit Committee acts as a point of contact, independent from management, with the external auditors (the “auditors”). The auditors have direct access to the Chairman of the Audit Committee, who meets with them periodically without management present.
The Audit Committee’s duties in relation to the auditors include:
Independence of the auditors is of critical importance to the Audit Committee, the Board and shareholders. The auditors write annually to the members of the Audit Committee confirming that they are independent accountants within the meaning of Section 290 of the Code of Ethics for Professional Accountants of the Hong Kong Institute of Certified Public Accountants and that they are not aware of any matters which may reasonably be thought to bear on their independence. The Audit Committee assesses the independence of the auditors by considering and discussing each such letter (and having regard to the fees payable to the auditors for audit and non-audit work and the nature of the non-audit work) at a meeting of the Audit Committee.
In deciding whether the auditors should provide non-audit services the following key principles are considered:
In addition, any services which may be considered to be in conflict with the role of the auditors must be submitted to the Audit Committee for approval prior to engagement, regardless of the amounts involved.
Fees paid to the auditors are disclosed in note 7 to the financial statements.