1. No work may be placed with the external auditors without the concurrence of the BT Group plc Board Audit and Risk Committee (“BARC”) in accordance with the procedures set out below. This applies to all BT Global entities and KPMG UK and all global KPMG affiliates.
2. The list below sets out the limited permissible services that our external auditors (“KPMG”) are able to provide. Services that do not feature on this list cannot be provided by the external auditors.
- Statutory and non-statutory audits of financial statements
- Interim reviews of financial information (including those not required by law but performed in accordance with generally accepted auditing standards and including verification of interim profits)
- Reporting required by a competent authority or regulator under UK law or regulation (including reporting to the regulator on regulatory financial statements, reporting on Solvency and Financial Condition Report under Solvency II)
- Reporting on internal financial controls when required by law or regulation
- Services which law or national regulations require the auditor to provide
- Assurance services performed on material included within or referenced from the annual report
- Reporting on the iXBRL tagging of financial statements in accordance with the European Single Electronic Format (ESEF) for annual financial reports
- Reports, required by or supplied to competent authorities/regulators supervising the audited entity, where the authority/regulator has either specified the auditor to provide the service or identified to the entity that the auditor would be an appropriate choice for service provider
- Extended audit or assurance work on financial or performance information and/or financial or operational controls, in the audited entity or a third-party service provider, where this work is closely linked with the audit work
- Reporting on government grants
- Reporting on covenant or loan agreements which require independent verification and other reporting to third parties with whom the audited entity has a business relationship
- Services which have been the subject of an application to the Competent Authority
- Generic subscriptions providing factual updates of changes to applicable law, regulation or accounting and auditing standards
- Services which support the entity in fulfilling an obligation required by UK law or regulation, including listing requirements where the provision of such services is time critical, the subject matter of the engagement is price sensitive and it is probable that an objective, reasonable and informed third party would conclude that the understanding of the entity obtained by the auditor for the audit of the financial statements is relevant to the service, and where the nature of the service would not compromise independence
- Where not otherwise required by law or regulation, a non-audit service in relation to information of the audited entity for which it is probable that an objective, reasonable and informed third party would conclude that the understanding of the entity obtained by the auditor is relevant to the service, and where the nature of the service would not compromise independence.
3. Any service involving contingent fees and secondments is prohibited.
4. Specific approval is required in advance from the BARC Chair and Group Chief Financial Officer for any non-audit service included on the list in paragraph 2 and with a value of greater than £50,000.
5. Where the non-audit service is included on the list in paragraph 2 but has a value below £50,000 these do not require specific approval from the BARC as it has given its continuing authority in respect of the listed services. However, such non-audit services with fees below £50,000 must still be approved in advance by the Group Chief Financial Officer or his delegate.
6. Non-audit services that were approved and started before 1 April 2020, but which would be impermissible under the new rules (i.e. are not included in the list in paragraph 2), may continue to their conclusion. However these services cannot be renewed or extended.
7. Fees for all non-audit services will be reported on a half-yearly basis to the BARC and the total value of all non-audit work undertaken by KPMG during a financial year will be reported annually to the Board. The audit/non audit fee ratio will be assessed annually and reported to the BARC.
