divisional and functional management to gain insight into GKN’s operations, risks and requirements. In order to assess performance against selected criteria, each firm was asked to carry out reviews of GKN’s financial reporting and integrity procedures. Their findings were presented to the relevant divisional and Group management teams and I attended a number of these presentations. All Committee members met informally with the proposed lead audit partners during the tender. The concluding stage of the process was the submission of a detailed written proposal and presentation to the Committee by each firm. The Committee then considered the merits of each and the feedback provided by all GKN employees involved in the process. The Committee took into consideration the culture and levels of service, communication, commitment, and capability demonstrated by each firm during the process. It also took into account the ability to provide global audit coverage to the Group’s subsidiaries and the use of audit-enhancing technology. Audit quality inspection reports issued by the FRC and PCAOB in the US were considered and it was confirmed that there would be no independence issues. While we acknowledged that each firm had the ability to provide a high quality audit, based on the selection criteria we decided to recommend to the Board that Deloitte LLP be appointed the statutory auditors of the Group following the conclusion of the 2015 audit. The proposal to appoint Deloitte LLP as external auditors will be put to shareholders at the 2016 AGM. We would like to thank PwC for their contribution to GKN and the firms involved in the tender. There are no contractual obligations restricting our choice of external auditors. The Company confirms that it complied with the provisions of the Competition and Markets Authority’s Order for the financial year under review.
We received regular updates on progress in respect of the continued development and improvement of the Group’s risk management systems and independent assurance programmes. In particular, we reviewed each division’s risk management systems in relation to product quality, programme management and contract management and the key performance indicators used to monitor each risk.
During the year we: • approved the 2016 Corporate Audit programme, including the proposed audit approach, coverage and allocation of resources • reviewed the effectiveness of Corporate Audit. In relation to consideration of the Corporate Audit programme for the forthcoming year, we reviewed the proposed audit approach, coverage and allocation of resources. We also received progress updates against the 2015 audit programme throughout the year. We reviewed the terms of reference and effectiveness of Corporate Audit, taking into account the views of Directors and senior management on matters such as independence, proficiency, resourcing, and audit strategy, planning and methodology. The review confirmed that the Corporate Audit function was independent and objective and remained an effective element of the Group’s corporate governance framework.
Internal control and risk management