Scope of Work External Auditors Business unit audits are designed to provide assurance The Audit Committee acts as a point of contact, that the risk management and internal control systems independent from management, with the external auditors of the Company are implemented properly and (the “auditors”). The auditors have direct access to the operating effectively, and that the risks associated with Chairman of the Audit Committee, who meets with them the achievement of business objectives are being periodically without management present. properly identified, monitored and managed. The frequency of each audit is determined by IA using its The Audit Committee’s duties in relation to the auditors own risk assessment methodology, which is based on include: the COSO (Committee of Sponsoring Organizations of • recommending to the Board, for approval by the Treadway Commission) internal control framework, shareholders, the auditors’ appointment considering such factors as recognised risks, • approval of the auditors’ terms of engagement organisational change, overall materiality of each unit, • consideration of the letters of representation to be previous IA results, external auditors’ comments, output provided to the auditors in respect of the interim and from the work of the Swire Pacific Group Risk annual financial statements Management Committee and management’s views. • review of reports and other ad-hoc papers from the Each business unit is typically audited at least once auditors every three years. Acquired businesses would normally • annual appraisal of the quality and effectiveness of be audited within 12 months. 10 assignments were the auditors conducted for Swire Properties in 2022. • assessment of the auditors’ independence and IA specifically assists the Audit Committee in carrying objectivity, including the monitoring of non-audit out the analysis and independent appraisal of the services provided, with a view to ensuring that their adequacy and effectiveness of the Group’s risk independence and objectivity are not, and are not seen management and internal control systems through its to be, compromised review of the process by which management has • approval of audit and non-audit fees completed the annual Control Self-Assessment, and the Auditors’ Independence results of this assessment. Independence of the auditors is of critical importance to IA conducts ad-hoc projects and investigative work the Audit Committee, the Board and shareholders. The as may be required by management or the Audit auditors write annually to the members of the Audit Committee. Committee confirming that they are independent Audit Conclusion and Response accountants in accordance with the Code of Ethics for Professional Accountants of the Hong Kong Institute of Copies of IA reports are sent to the Chairman of the Certified Public Accountants and that they are not aware Board, the Chief Executive, the Finance Director and the of any matters which may reasonably be thought to bear external auditors. The results of each review are also on their independence. The Audit Committee assesses presented to the Audit Committee. the independence of the auditors by considering and Management is called upon to present action plans in discussing each such letter (and having regard to the fees response to IA’s recommendations, including those payable to the auditors for audit and non-audit work and aimed at resolving material internal control defects. the nature of the non-audit work) at a meeting of the These are agreed by IA, included in its reports and Audit Committee. followed up with a view to ensuring that they are satisfactorily undertaken. 105 SWIRE PROPERTIES ANNUAL REPORT 2022