BP 2014 Annual Report Download - page 71

Corporate governance
Permitted services
Audit related
Advice on accounting, auditing and financial reporting.
Internal accounting and risk management control reviews.
Non-statutory audit.
Project assurance/advice on business and accounting process
improvement.
Due diligence (acquisition, disposals, joint arrangements).
Tax services
Tax compliance.
Direct and indirect tax advisory services.
Transaction tax advisory services.
Assistance with tax audits and appeals.
Tax compliance/advisory relating to human capital
and performance/reward.
Transfer pricing advisory services.
Tax legislative monitoring.
Tax performance advisory.
Other services
Workshops, seminars and training on an arm’s length basis.
Assistance on non-financial regulatory requirements.
Provision of independent third-party audit on BP’s Conflict Minerals
Report.
Non-permitted services
SEC principles of auditor independence
Bookkeeping/other services related to financial records.
Financial information systems design and implementation.
Appraisal, valuation, fairness opinions, contribution in-kind.
Actuarial services.
Internal audit outsourcing.
Management functions.
HR functions.
Broker-dealer, investment advisor, banking services.
Legal services.
Expert services unrelated to audit.
Public Company Accounting Oversight Board (PCAOB) ethics and
independence rules
Contingent fees.
Confidential or aggressive tax position transactions.
Tax services for persons in financial reporting oversight roles.
Permitted and non-permitted audit services
Non-audit services
Audit objectivity and independence is safeguarded through the limitation of
non-audit services to tax and audit-related work which falls within defined
categories. BP’s policy on non-audit services states that the auditors may
not perform non-audit services that are prohibited by the SEC, Public
Company Accounting Oversight Board (PCAOB) and UK Auditing Practices
Board (APB). The categories of approved and prohibited services are
outlined below.
The audit committee approves the terms of all audit services as well as
permitted audit-related and non-audit services in advance. The external
auditor is only considered for permitted non-audit services when its
expertise and experience of the company is important. A two-tier system
operates for approval of audit-related and non-audit work. For services
relating to accounting, auditing and financial reporting matters, internal
accounting and risk management control reviews or non-statutory audit,
the committee has agreed to pre-approve these services up to an annual
aggregate level. For all other services which fall under the ‘permitted
services’ categories, approval above a certain financial amount must be
sought on a case-by-case basis. Any proposed service not included in the
permitted services categories must be approved in advance either by the
audit committee chairman or the audit committee before engagement
commences. The audit committee, chief financial officer and group
controller monitor overall compliance with BP’s policy on audit-related and
non-audit services, including whether the necessary pre-approvals have
been obtained.
Committee review
The audit committee undertakes an annual evaluation of its performance
and effectiveness. In 2014 the committee used an online survey which
examined governance issues such as committee processes and support,
the work of the committee and priorities for change.
Areas of focus for 2015 arising from the evaluation included the inclusion of
broader segment and business reviews, undertaking more deep dive
reviews and suggestions for further committee training.
BP Annual Report and Form 20-F 2014 67