Audit and Risk Committee
Audit and Risk Committee Duties
The principal duties of the Committee are to:
- Oversee the integrity of the Group’s financial statements and public announcements relating to financial performance.
- Hold the relationship with the external auditor, agree the audit fee and oversee the external audit process.
- Establish formal and transparent arrangements for considering how the Company should apply the corporate reporting, risk management and internal control principles.
- Oversee the internal audit process.
- Monitor the effectiveness of financial controls and the process for identifying and managing risk throughout the Group.
- Monitor the financial reporting process and submit recommendations.
- Monitor the statutory audit of the Annual Report and financial statements.
- Review and monitor the external auditor’s independence and the provision of additional services.
The full terms of reference for the Committee can be found on the Group’s website, corporate.dunelm. com. These terms were last reviewed by the Committee in June 2020.
The Committee's full terms of reference is available here:
A copy of our whistleblowing policy is available here:
Our policy on the use of the statutory auditor is available here:
Audit and Risk Committee Membership
The following Directors served on the Committee during the year, and meeting attendance is set out in the table below:
|
Name |
From: |
To: |
Meetings attended |
Skill area |
|
Ian |
10 July 2019 |
To date |
3/3 |
Financial |
|
William |
1 July 2015 |
To date |
3/3 |
Operational |
|
Peter |
10 September 2015 |
To date |
3/3 |
Operational |
|
Paula |
4 September 2019 |
To date |
2/2 |
Operational |
|
Liz |
1 May 2013 |
19 November 2019 |
1/1 |
Financial |
- Ian Bull and Paula Vennells were both appointed to the Board during the financial year and joined the Committee on appointment. Ian Bull succeeded Liz Doherty as Chair when she retired from the Board on 19 November 2019.
- Liz Doherty retired from the Board and the Committee, as planned, on 19 November 2019. Prior to her retirement Liz chaired the Committee
The Company Secretary, Dawn Durrant, acts as secretary to the Committee.
The Committee also met in September 2020.
The Chief Executive Officer, Chief Financial Officer and the Chairman of the Board usually attend meetings by invitation. In addition, the following attended: Group Finance Director, Chief Information Officer, representatives of PwC (for external audit matters) and representatives of KPMG (for internal audit matters).
The Board considers that I have recent and relevant financial experience to chair the Committee, by virtue of my professional qualification and my previous executive roles, including as Chief Financial Officer of Parkdean Resorts Group and Ladbrokes plc. Members of the Committee can also demonstrate a breadth of experience across the retail and consumer goods sector through their current and previous roles – please see the Directors’ biographies on pages 82 to 85 for full details.
Summary of Principal Activities and Focus 2019/20
Routine Items
- Approval of the FY19 full year results issued in September 2019 and the approval of the FY20 results, half-year issued in February 2020 and full year results issued in September 2020.
- Assessment of the key estimates and adjustments used in respect of the half and full year results.
- Review of the process for identifying and managing risk and a full review of the principal risks and how they are managed in August 2019, a mid-year review in February 2020, and a further ‘deep dive’ review in June 2020.
- Review of business continuity and crisis management planning.
- Verification of the independence of the external auditor, approval of the scope of the audit plan and the audit fee, and review of the external auditor’s audit findings.
- Review of fraud and Bribery Act controls and cyber security, which are standing agenda items for each meeting.
- Review of Prompt Payment Code reporting.
- Receipt of internal audit reports.
- Approval of the annual Audit and Risk Committee Report.
- Review of whether the 2018/19 and 2019/20 Annual Reports are ‘fair, balanced and understandable’.
- Annual review of committee terms of reference, Tax Strategy, policy on use of auditors for non-audit services, and auditor rotation policy.
- Formal review of external auditor performance.
- Formal review of committee effectiveness.
Specific topics
- Adoption of formal Audit and Risk Committee objectives.
- Update on the steps being taken to implement the requirements of IFRS 16 ‘Leases’.
- Appointment of KPMG as internal auditor, and approval of the Internal Audit Charter.
- Formalised policy on employment of former employees of the external auditor.
- Compliance with new narrative reporting requirements.
- Approach to climate change risk assessment and reporting.
- Cyber security ‘deep dive’.
- Approach to audit reform
Focus areas for 2020/21 and Beyond
- Specific project areas derived from the risk management process and agreed by the Committee.
- Post Covid-19 Going Concern and Viability Statement.
- Focus on new reporting requirements for 2019/20 and 2020/21, including the Corporate Governance Statement, s172 Companies Act and new executive pay reporting requirements.
- Preparation for reporting under the Task Force for Climate-related Financial Disclosures.
- Understanding and adopting agreed audit reforms, including: Kingman Review, CMA, BEIS and Brydon Review.
- Responding to increasing focus from regulators, shareholders and other stakeholders on the role of the Audit and Risk Committee and the quality and integrity of external audits.
- Maintaining high standards in relation to material estimates, judgements and rationale.
- Continuous focus on risk management, including the completion of a horizon-scanning process to identify emerging risks.
- Development of risk appetites and how these are embedded into core management processes.
- Ensuring risk management is instrumental in driving the internal audit and assurance plan.