Audit & Risk Committee
The role of the Audit & Risk Management Committee is to assist the Board in its oversight responsibilities for all matters related to financial management and reporting, external audit, internal audit and risk management of the Group.
The committee monitors management processes in relation to preparation of financial reports, including the annual financial statements, and the processes inrelation to external and internal audit. The committee also assists the Board in regard to compliance with the ASX Listing Rules, the ASX Corporate Governance Principles & Recommendations and the Corporations Act requirements.
This means that the committee reviews the annual financial statements, the adequacy of the financial control environment, applicable financial management and reporting policies (including policies relating to potential fraud and misappropriation) and developments in international financial reporting standards. The committee also monitors enterprise risk management activity, its impact on mitigating material risks to the business and the work of the external and internal auditors.
In accordance with the Corporations Act, the Group has appointed external auditors whose primary role is to form an opinion as to the truth and fairness of the annual financial statements. The Group appoints external auditors who demonstrate quality and independence. BDO, Chartered Accountants, are the current external auditors of the Fortescue Group. It is BDO’s policy to rotate audit engagement partners every five years in accordance with the Corporations Act. BDO attends committee meetings by invitation and annually reports to the committee on its independence and the outcomes of its audit. The committee reviews the scope of the annual audit plan and related audit fees.
The committee believes that a robust and risk based internal audit function is a critical part of ensuring that a strong financial risk and control environment is maintained across the Group. The committee has decided that an outsourced internal audit function best suits the needs of the Group and has appointed KPMG, Chartered Accountants, to provide the service. KPMG has been providing this service for three years. The committee approves the annual internal audit plan and monitors findings from internal audit reviews, including actions proposed by management to address issues reported by the internal auditors.