SWIRE PROPERTIES ANNUAL REPORT 2023 GIAD reports directly to the Audit Committee without the Management is required to provide action plans in need to consult with management, and via the Audit response to internal audit recommendations, including Committee to the Board. GIAD has unrestricted access to those aimed at resolving material internal control defects. all areas of the Group’s business units, assets, records and These are agreed by GIAD, included in its reports and personnel in the course of conducting its work. followed up with a view to ensuring that they are The annual internal audit programme and resources are satisfactorily undertaken. reviewed and agreed with the Audit Committee. External Auditors Scope of Work The Audit Committee acts as a point of contact, Business unit audits are designed to provide assurance that independent from management, with the external the risk management and internal control systems of the auditors (the “auditors”). The auditors, Company are implemented properly and operating PricewaterhouseCoopers, have direct access to the effectively, and that the risks associated with the Chairman of the Audit Committee, who meets with them achievement of business objectives are being properly periodically without management present. identified, monitored and managed. The Audit Committee’s duties in relation to the The frequency of each audit is determined by GIAD using auditors include: its own risk assessment methodology, which is based on • recommending to the Board, for approval by the COSO (Committee of Sponsoring Organizations of the shareholders, the auditors’ appointment Treadway Commission) internal control framework, • approval of the auditors’ terms of engagement considering such factors as recognised risks, organisational • consideration of the letters of representation to be change, overall materiality of each unit, previous internal provided to the auditors in respect of the interim and audit results, external auditors’ comments, output from annual financial statements the work of the Swire Pacific Group Risk Management • review of reports and other ad-hoc papers from Committee and management’s views. Each business unit is the auditors typically audited at least once every three years. Acquired • annual appraisal of the quality and effectiveness of businesses would normally be audited within 12 months. the auditors 16 assignments were conducted for Swire Properties • assessment of the auditors’ independence and in 2023. objectivity, including the monitoring of non-audit In addition, GIAD assists the Audit Committee in carrying services provided, with a view to ensuring that their out the analysis and independent appraisal of independence and objectivity are not, and are not seen the adequacy and effectiveness of the Group’s risk to be, compromised management and internal control systems through its • approval of audit and non-audit fees review of the process by which management has Auditors’ Independence completed the annual Control Self-Assessment, and the results of this assessment. Independence of the auditors is of critical importance to Furthermore, GIAD conducts ad-hoc projects and the Audit Committee, the Board and shareholders. The investigative work as may be required by management or auditors write annually to the members of the Audit the Audit Committee. Committee confirming that they are independent accountants in accordance with the Code of Ethics for Audit Conclusion and Response Professional Accountants of the Hong Kong Institute of Copies of internal audit reports are sent to the Chairman of Certified Public Accountants and that they are not aware of the Board, the Chief Executive, the Finance Director and any matters which may reasonably be thought to bear on the external auditors. The results of each review are also their independence. The Audit Committee assesses the presented to the Audit Committee. independence of the auditors by considering and discussing each such letter (and having regard to the fees payable to the auditors for audit and non-audit work and the nature of the non-audit work) at a meeting of the Audit Committee. 107