Vodafone Group Plc Annual Report 2025 91
Strategic report
Governance
Financials
Other information
Governance continued Audit and Risk Committee continued External audit The Committee has primary responsibility for overseeing the relationship with the external auditor, EY. This includes making the recommendation on the appointment, reappointment and removal of the external auditor, assessing its independence on an ongoing basis, and approving the statutory audit fee, the scope of the statutory audit and the appointment of the lead audit engagement partner. The lead audit partner role rotated to Michael Rudberg, a pre-existing partner on the audit team, for the year ended 31 March 2025. EY presented to the Committee its detailed audit plan for the 2025 financial year, which outlined its audit scope, planning materiality and its assessment of key audit risks. The identification of key audit risks is critical in the overall effectiveness of the external audit process. The Committee also received reports from EY on its assessment of the accounting and disclosures in the financial statements and financial controls. The last external audit tender took place in 2019, which resulted in the appointment of EY for the financial year ended 31 March 2020. The Committee will continue to review the auditor appointment and anticipates that the audit will be put out to tender at least every 10 years after the first financial year of appointment. In deciding whether to conduct an external audit tender, the Committee considers a range of factors, including the potential cost and efficiency benefits of retaining the incumbent auditor. The Group has complied with the September 2014 Competition and Markets Authority Order for the financial year under review. R ead the Auditor’s report on pages 119 to 126
Independence and objectivity In its assessment of the independence of the auditor, and in accordance with the US Public Company Accounting Oversight Board’s (‘PCAOB’) standard on independence, the Committee received details of all relationships between the Company and EY that may have a bearing on its independence. The Committee received confirmation from EY that it is independent of the Company in accordance with US federal securities law and the applicable rules and regulations of the SEC and the PCAOB. Effectiveness of the external audit process The Committee reviewed the quality of the external audit process throughout the year and considered the performance of EY. This comprised the Committee’s own assessment and the results of a detailed feedback survey of senior personnel across the Group. Based on these reviews, the Committee concluded that there had been appropriate focus and challenge by EY on the primary areas of the audit and that EY had applied robust challenge and scepticism throughout the audit. EY audit and non-audit fees Total fees payable to EY for audit and non-audit
Audit fees The Committee reviewed and discussed the fee proposal and was engaged in agreeing audit scope changes. Following the receipt of formal assurance that fees were reasonable for the scope of work required, the Committee agreed an audit fee of €27 million for statutory audit services in the year (FY24: €26 million). Non-audit fees To protect the independence and objectivity of the external auditor, the Committee has a policy for the engagement of the external auditor to provide non-audit services (‘the policy’). The policy prohibits EY from playing any part in management or decision-making, providing certain services such as valuation work and the provision of accounting services. The policy incorporates the requirements of the FRC’s Ethical Standard, including a ‘whitelist’ of permitted non-audit services which mirrors the FRC’s Ethical Standard. The FRC’s revised 2024 Ethical Standard became effective on 15 December 2024. The revisions to the Ethical Standard have not resulted in any changes to the policy compared to the prior year. The Committee has pre-approved that EY can be engaged by management, subject to the policies set out above, and subject to: – A €60,000 fee limit for individual engagements; – A €500,000 total fee limit for services where there is no legal alternative; and – A €500,000 total fee limit for services where there is no practical alternative supplier.
For those permitted services that exceed these specified fee limits, the Committee Chair pre- approves the service. Non-audit fees in the year were €3 million (FY24: €10 million). The level of non-audit fees in the prior year ended 31 March 2024 was higher than recent years. This is primarily attributable to Reporting Accountant services that were provided by EY in connection with the merger of Vodafone UK with Three UK and other audit-related services associated with the disposal of Vodafone Spain which completed on 31 May 2024. Vodafone did not incur any tax fees with EY and EY did not provide any products or services to Vodafone other than the audit and audit-related services disclosed above.
services in the year ended 31 March 2025 amounted to €30 million (FY24: €36 million). FY25 €m
FY24 €m 26 10
Audit fees
27 30 3
Non-audit fees – Audit-related
Total 36 See note 3 ‘Operating profit’ in the consolidated financial statements for more information.
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