that any non-audit services during the year have been minimal. In addition, whilst technically classed as non-audit services, the activities relate to compliance assurance which Anchor requests as part of the year end process and are therefore audit related. The committee therefore takes the view that there is no impact on BDO’s independence by procuring these services. ARC carried out an annual survey on the effectiveness of external audit. Board members and key officers participated. The survey, in respect of the 2022-23 financial statements, indicated that the audit had gone well and the relationship allowed for a robust audit process to ensure it demonstrates the independence and challenge which arises from the audit. The survey indicated that improvements could be made to the timing and communication around the completion and signing of the accounts. This has been discussed with the auditors and improvements are expected with this year’s audit. The external auditor is appointed/reappointed by the Board annually. BDO’s external audit contract commenced in 2017 following an open tender process. It will be re-tendered with a view to a new contract being in place for the year ending 31 March 2027. External audit services are subject to an open tender process to ensure best value and quality is achieved in the appointment. In accordance with its remit, during the period, ARC reviewed and approved: • The auditor’s plans for the audit of Anchor’s financial statements for the financial year ending 31 March 2024. • The terms of engagement for the audit, proposed audit fee and associated expenses. Financial Reporting One of ARC’s key responsibilities is to satisfy itself that Anchor’s internal financial controls are robust. During the period, the committee reviewed a wide range of financial matters including a review of the tax strategy, accounting policies, and accounting estimates and judgements. ARC reviewed Anchor’s financial reporting during the period, including Anchor’s interim statement as required for Anchor’s public bond. In relation to the 2023-24 year end, ARC has: • Considered and approved the accounting policies and judgements on which the annual report and accounts have been based. The notes to the accounts provide details of all accounting policies. • Reviewed the draft financial statements. • Considered the audit plan and completion report from the external auditor. • Considered and made a recommendation to the Board regarding whether the annual report and accounts are fair, balanced and understandable. • Considered and made a recommendation to the Board on Anchor’s ability to continue as a going concern.
The Internal Audit Plan is approved by ARC. During the period, the internal auditors KPMG undertook ten audits across a range of areas. The audit plan started with twelve and two audits were merged to become one. Another audit was partially completed and then re-scoped and it will be completed during the next financial year. The final report from each internal audit was discussed during an ARC meeting, providing the opportunity for ARC to consider the findings and oversee management’s progress against actions. The overall summary for the 2023-24 programme was “improvement required” and that management had “reasonable awareness”. Implementation of internal and external audit actions is tracked on a continuous basis and reported quarterly to ARC. As mentioned last year, KPMG’s internal audit contract came to an end on 31 March 2024. A procurement process took place for a new contract and PwC commenced their term as Anchor’s new auditors on 1 April 2024. ARC is appreciative of the work KPMG has done for Anchor in reviewing and recommending improvements to the control environment during their tenure. ARC receives regular reports on governance, legal and compliance matters from the Group Company Secretary, Head of Legal and Director of Risk & Assurance, as well as building health and safety compliance matters from the Executive Director, Property & Assets. ARC considered the controls and assurance framework which is in place to mitigate cyber risk. Anchor has a variety of specialist consultants and contractors who provide assurance that Anchor’s cyber environment is suitably secure. ARC has started to monitor the results of simulated phishing exercises and training which are in place to remind colleagues of cyber risks and test their ability to spot rogue emails. External Audit BDO LLP is the external auditor for Anchor. ARC is confident of the independence and the objectivity that BDO bring to the effectiveness of the external audit process. This is based upon BDO’s robust internal processes, their continuing challenge, their focused reporting and discussions with both management and the committee. The external audit partner at BDO had been in post for seven years and, in line with good practice, has now stepped away from oversight of Anchor’s contract. A new external audit partner has been appointed, for the year ending 31 March 2024, who has not worked with Anchor previously, to ensure continued independence. Anchor has adopted a policy on the procurement of non-audit services from the external auditors. ARC has oversight through regular reporting of all non-audit services procured; please see Note 5 to the financial statements for details of non-audit services procured from BDO throughout the year. The committee notes
40 Anchor Hanover Group Annual Report & Financial Statements 2024
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