The external auditors are responsible for reporting on whether the financial statements are fairly presented and that they are prepared in compliance with International Financial Reporting Standards. Their audit also includes an assessment of selected internal controls. The preparation of the annual financial statements and the adequacy of the systems of internal controls remains the responsibility of the directors.
Where permissible, the external auditors are appointed to provide non-audit services. The group’s policy is to use its external auditors for non-audit services such as tax and accounting where the use of other consultants would not make sound commercial sense and where good corporate governance is not compromised by the engagement.
Internal audit and internal controlsInternal control systems
Management is responsible for systems of internal control. Internal control systems are designed to assist in achieving our business goals and safeguard assets. Systems of internal control also play a key role in preventing and detecting fraud and error.
There are inherent limitations to the effectiveness of any system of internal control, including the possibility of human error and the circumvention or overriding of controls. Accordingly, even an effective internal control system can provide only reasonable assurance with respect to financial statement preparation and asset safeguarding. Furthermore, the effectiveness of an internal control system can change with circumstances and for this reason this needs to be, and is, reviewed and updated on a regular basis.
Nothing has come to the attention of the directors, or of the internal auditors, to indicate that any material breakdown in the functioning of Bell’s key internal controls and systems occurred during 2010.