Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 177 report information sustainability report Governance review review statements Annual Report 2022 Directors’ report: Board Audit Committee report (continued) the basis it continued to reflect current were declined by the Committee in 2022 control reports and specific audit applicable rules and guidelines and met the (2021: none). On a quarterly basis, the procedures, required by law or regulation to be provided by the needs of the business. Any changes to the Committee scrutinised details of Policy are required to be approved at a individually approved and pre-approved statutory auditor Group level by the Committee. This is in services undertaken by KPMG in order to • other attestation and assurance accordance with laws applicable in the UK satisfy itself that they posed no risk to services, such as ongoing attestation and FRC guidance, pursuant to which audit independence, either in isolation or on an and assurance services for treasury and committees of Public Interest Entities aggregated basis. capital markets transactions to meet (such as Barclays) are required to approve For the purposes of the Policy, the regulatory requirements, including non-audit services provided by their Committee has determined that any regular reporting obligations and auditors to such entities; and subsidiary service of a value of under £50,000 is to be verification reports. Public Interest Entities in the UK – such as regarded as trivial in terms of its impact on The Statutory Audit Services for Large BBUKPLC and BBPLC – can rely on the Barclays' financial statements and has Companies Market Investigation approval of non-audit services by the required the Group Financial Controller to (Mandatory Use of Competitive Tender ultimate parent’s Board Audit Committee. specifically review and confirm to the Processes and Audit Committee Pursuant to the Policy, audit services and Responsibilities) Order 2014 Committee that any service with a value of the fee cap are monitored by the relevant between £50,000 and £100,000 may also An external audit tender was conducted in Board Audit Committee, as appropriate. be regarded as such. Accordingly, any 2015 and the decision was made to Under the Policy, except for specific service with a value of less than £100,000 appoint KPMG as Barclays’ external auditor categories of permitted services that is treated as a pre-approved service, with effect from the 2017 financial year, require explicit Committee approval, the subject to satisfactory review and certain with PwC resigning as the Group’s Committee has pre-approved all exceptions. The Committee undertook a statutory auditor at the conclusion of the review of pre-approved services at its Permitted services for which fees are less 2016 audit. than £100,000. However, all proposed meeting in December 2022. Barclays is in compliance with the work, regardless of the amount of the fees, KPMG have however recently advised the requirements of The Statutory Audit must be sponsored by a senior executive Committee that, as more fully described in Services for Large Companies Market and recorded on a centralised online their audit report, a KPMG member firm Investigation (Mandatory Use of system, with a detailed explanation of the has provided services in connection with Competitive Tender Processes and Audit clear commercial benefit arising from the preparation of local statutory accounts Committee Responsibilities) Order 2014, engaging the auditor over other potential of a small overseas subsidiary not in scope which relates to the frequency and service providers. The lead audit for the group audit. KPMG has assured the governance of tenders for the engagement partner must also confirm Committee, having made appropriate appointment of the external auditor and that the engagement has been approved enquiries of their member firms providing the setting of a policy on the provision of in accordance with the auditor’s own services to the Group, this is an isolated non-audit services. internal ethical standards and does not instance. In these circumstances the As explained in previous Committee pose any threat to the auditor’s Committee agrees with KPMG’s reports, provided that KPMG continues to independence or objectivity. All requests assessment that this has not impaired maintain its independence and objectivity, to engage the auditor are assessed by their integrity or objectivity. The and the Committee remains satisfied with senior management, who are not involved Committee have also asked management its performance, the Group has no in any work to which the proposed to reinforce the necessity for requests for intention of tendering for an alternative engagement relates, before work can non-audit services to clearly distinguish external auditor before the end of the commence. the different elements of the service to be current required period of 10 years. provided to ensure they are all permitted. Requests for Permitted service types in Accordingly, any tender would be in respect of which the fees are expected to The Committee will also consider if any respect of the 2027 financial year onwards meet or exceed the above threshold but revisions of the Policy are required to make and is likely to take place in 2025. The expected to be less than £250,000 must it clearer in this respect. Committee believes it would not be be approved by the Chair of the The fees payable to KPMG for the year appropriate to tender before this date as it Committee (or an appropriate alternate) ended 31 December 2022 amounted to recognises that while it is important to before work is permitted to begin. Services £71m (2021: £62m), of which £13m (2021: ensure the audit firm remains objective where the fees are expected to be £12m) was payable in respect of non-audit and does not become overly familiar with £250,000 or higher must be approved by services. A breakdown of the fees payable management, there is an important the Committee as a whole. All expenses to the auditor for statutory audit and non- balance to be struck with the investment and disbursements must be included in the audit work can be found in Note 40 of the of time required both from management fees calculation. financial statements. Of the £13m of non- and any completely new audit team for During 2022, all engagements for which audit services provided by KPMG during them to gain sufficient understanding of a expected fees met or exceeded the above 2022, the significant categories of large and complex organisation as Barclays thresholds were evaluated by either the engagement, i.e. services where the fees to ensure a top quality audit. The amounted to more than £500,000, Committee Chair or the Committee Committee also observes that there has members as a whole, who, before included: been significant turnover of the senior confirming any approval, assured members of the audit team since 2017 and • audit-related services: services in themselves that there was justifiable more recent changes of the Barclays connection with CASS audits reason for engaging the auditor and that senior finance team, both of which have • other services in connection with its independence and objectivity would not reduced any potential familiarisation regulatory, compliance and internal be threatened. No requests to use KPMG threat.