Governance Report Report of the Audit and Risk Committee The Audit and Risk Committee has an important role in ensuring the integrity of the Group’s financial report, monitoring the adequacy of the Group’s risk management and internal controls and overseeing the performance of the external auditors. By Rupert The audit has been a challenge this year The Company has made a number of senior Faure Walker and highlighted weaknesses in our internal blue chip hires who began joining in February, processes and teams. The early part of the across the Company and Content teams. audit process was delayed due to covid-19 They include a new Group Financial Controller, restrictions and resourcing in the Netherlands a new CFO for the Content practice, a new but it subsequently became clear that there Global Finance Transformation lead, a new were issues within the Content practice Group Treasurer and a new Global Compliance which were the root cause of the later lead. That new senior management team will delays. The issues which were identified be making further hires to strengthen their include control weaknesses, inadequate respective teams in due course. Mary is also documentation and a lack of understanding in improving our control environment – and in the application of the accounting standards, light of what has happened this work will particularly IFRS15, relating to revenue and focus particularly on processes and controls cost of sales recognition – issues which were around revenue recognition, IFRS15, and cost isolated to the legacy MediaMonks business. of sales recognition. We will be monitoring that Our new CFO, Mary Basterfield, was already work closely and taking note of all of PwC’s working to strengthen the finance team to recommendations to us as a committee. support the scale and continued growth of the We will also be strengthening this committee business, but these issues have accelerated with a new non-executive chair. the requirement for that and identified further I have been the Chairman of the Audit and Risk resources which are being put in place. We are Committee since re-admission of the Company satisfied that the new structure for the Group to the official list upon the reverse takeover of team which Mary is implementing will improve the S4Capital Group. The other members of the control function. She has increased the the Committee are Sue Prevezer and Paul Roy. number of her direct reports to cover FP&A, To promote interaction and information flow Financial Control and Reporting, Treasury, between the Audit and Risk Committee and Finance Transformation and Tax. the Board, the Executive Chairman and the Chief Financial Officer may be invited to attend meetings of the Committee as observers, but are not entitled to count in the quorum of such meetings or vote on business. 62 S4Capital Annual Report and Accounts 2021