Meetings with Management and the Finance function
During 2022, the ARC met frequently with Management; reviewed the 2022 annual budget and recommended to the Board the approval of the 2023 annual budget.
The ARC conducted an evaluation of the performance of the Finance function and is satisfied with the leadership expertise of the Chief Financial Officer, however some improvement is required in the quality of financial reports and the resourcing of the Finance Team.
External auditors
Following the expiration of their previous contract, a tender process was initiated and Mazars was subsequently selected as the external auditors for a duration of 6 years starting from 2022. The lead engagement partner and manager on the financial audit will be rotating in order to minimize independence risk because of possible familiarity with management.
The ARC held discussions with the external auditors throughout the year, to keep the ARC briefed on the audit progress and all audit and accounting issues. The ARC received assurances that the audit process went as planned, with full support from SAICA management. The ARC conducted a private interview with external auditors before giving its clearance on the various financial statements.
The ARC regularly assesses the external auditor’s independence, including the absence of conflicts of interests and is satisfied with the independence and objectivity of the external auditors. The ARC reviewed the annual audit plan and considered the scope and fees to be paid to the auditors. The ARC approved the non-audit services provided by the external auditors in line with the non-audit services policy.
The ARC conducted an evaluation of external audit’s performance and is satisfied with its outcome.
Internal Audit
The Internal Audit unit is an independent outsourced function of SAICA with a direct reporting line to the ARC. The internal audit coverage plan for 2022 was approved and implemented. The ARC took note of the outcome of the evaluation, together with key conclusions and recommendations raised. The committee also monitored the status of implementation of the Internal Audit action plan.
Internal Audit performed additional reviews in the year under review within the set limits and the scope of work and fee was approved by the ARC.
The ARC conducted an evaluation of Internal Audit’s performance for 2022 and is satisfied with its outcome.
Combined Assurance, Risk and Compliance Management
The ARC addressed various aspects of risk management and regularly reviewed SAICA’s risk and combined assurance activities. SAICA received an opinion of needing some improvement on risk management as expressed by the internal auditors. The ARC reviewed SAICA’s Enterprise Risk Management maturity assessment independently assessed by SNG-Grant Thornton.
The ARC further received assurance from the board sub-committees on the effectiveness of the risk management processes relevant to their portfolios.
The ARC monitored the mitigation of control weaknesses and levels of non-compliance and was satisfied that the material compliance matters are adequately monitored and addressed. The ARC was also updated on SAICA’s Group approach to regulatory developments and tax compliance. In addition, the ARC considered the process for the whistleblowing reporting which is under the custody of the risk and compliance unit and obtained the Unit’s assurance that all reported matters have been adequately addressed with the assurance for material matters. Matters reported through the whistleblowing process in the scope of the Board and its sub-committees are referred for investigation.
The ARC conducted an evaluation of the performance of the risk and compliance function, and improvement is required in some areas.
Annual Financial Statements
The ARC examined SAICA’s 2022 financial statements, prepared in accordance with International Financial Reporting Standards (IFRS) and has discussed with the external auditors, in the presence of the SAICA’s management and in private, in order to obtain an understanding of the audit procedures applied.
Based on the work undertaken and the information received (including the opinion from the external auditor on the separate and consolidated financial statements and a representation letter from the Management of SAICA), the ARC confirms that the separate and consolidated financial statements of SAICA, presents a true and fair view of the financial position of SAICA as of 31 December 2022, in accordance with IFRS. On this basis, the ARC recommended the group financial statements of SAICA to the SAICA Board of Directors of which the Board has approved the submission of the SAICA separate and consolidated financial statements to the members of SAICA on 24 April 2023.
ARC concurs and accepts the conclusions of the external auditor on the annual financial statements and is of the opinion that the audited separate and consolidated financial statements be accepted and read together with the report of the external auditors.
Integrated report
The committee reviewed the content of the integrated report ensuring it is presented in accordance with the Integrated Reporting Framework and recommended it for approval to the Board. An independent limited assurance review of the SAICA’s Annual Integrated Report was provided by the external auditors.
The Board approved the submission of the SAICA Annual Integrated Report on 24 April 2023, for consideration by members at the Annual General Meeting on 25 May 2023.
2022 Key Matters of Stakeholder Interest
The ARC provided oversight of the forensic investigations into the 2021 APC matter, the outcome of which was communicated by the Board to members in December 2022.
