Corporate Governance - Bendigo and Adelaide Bank
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Corporate Governance

Selection and appointment of the External Auditor

Rotation of External Auditor Engagement Partners


Overview


Principle 4 of the 2007 ASX Corporate Governance Principles and Recommendations seeks to safeguard the integrity of financial reporting. A key aspect of this objective is to ensure the independence and competence of the company’s external auditors. To support this, the Guide to reporting on Principle 4 recommends that information on procedures for the selection and appointment of the external auditor, and the rotation of external auditor engagement partners be made publicly available on the company’s website.

APRA prudential standard APS 310 Audit and Related Matters requires an ADI to appoint an auditor whose responsibilities include submitting directly to APRA all reports required to be produced under prudential standard APS 310. The auditor appointed for the purposes of prudential standard 310 may be the same auditor who audits an ADI for the purposes of the Corporations Act 2001 (Cth). The terms of engagement of the auditor must be set out in a legally binding contract between the ADI and the auditor, and must cover a variety of matters set out in paragraph 10 of prudential standard 310.

Policy and Procedure


Policy for appointment of the Bank’s external auditor
The policy is for Bendigo and Adelaide Bank to appoint an independent external auditor with the appropriate skills, knowledge and experience to contribute to the integrity of the Bank’s financial reporting, for the purposes of fulfilling the role and responsibilities of the auditor appointed under APRA prudential standard 310 and auditing the Bank for the purposes of the Corporations Act.
Selection and appointment of the external auditor
1. Assessment

The following factors are assessed as part of the external auditor selection process.

  • Professional standing, reputation, relevant experience and independence.
  • Adequate resources including relevant industry and technical expertise.
  • Ability to provide quality and efficient audit services.
2. Selection criteria A draft selection criteria is developed by the Audit Committee and recommended to the Board for adoption, having regard to the above assessment considerations.
3. Selection process The Audit Committee has the responsibility to recommend to the Board appropriate procedures for the selection, appointment and reappointment of the external auditor. The selection process may involve selecting firms to tender by invitation or holding an open tender. The tender submission and assessment process will be conducted in compliance with the Bank’s Tender Policy.
4. Appointment It is the responsibility of the Audit Committee to make recommendations to the Board on the appointment and removal of the external auditor, the scope of the external audit, engagement terms and the remuneration of the auditor.
5. Engagement partner rotation It is the responsibility of the Audit Committee to make recommendations to the Board on the rotation of external audit engagement partners.

Note: The partner rotation policy approved for the current auditor, Ernst & Young, requires its engagement partners to change every five years with a two year cooling off period before a partner can recommence the engagement.
6. Review This policy will be reviewed at least every two years.

 

This policy was adopted by the Board of Bendigo and Adelaide Bank Limited on 28 June 2004 and amended on 28 April 2008 and 28 April 2009 and 10 November 2011.