BT Group Policy
Services Provided by the External Auditors
1. No work may be placed with the external auditors without the concurrence of the Group
Finance Director or his delegate.
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2. The external auditors are prohibited from supplying services in these areas:
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bookkeeping and accounts preparation (unless for insignificant subsidiaries);
financial information systems design and implementation;
appraisal or valuation matters, where the results will be included in the financial statements and
subject to audit;
 actuarial services;
 internal audit, where the work will be subject to reliance by the external auditors;
 management functions including recruitment;
 broking or investment banking;
 legal services;
 restructuring services, if the entity is considered to be in distress.
 any service wholly or partly on a contingent fee basis.
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3. The services listed below do not require specific approval from the Audit and Risk Committee or Audit &
Risk Committee Chairman as the Audit & Risk Committee has given its continuing authority in respect of the
listed services. However, all non-audit fees which fall under the continuing authority should still be
approved by the Group Finance Director or his delegate.
4. Specific approval is required in advance from the Audit & Risk Committee or Audit & Risk Committee
Chairman for all audit and non-audit services unless they are included under the continuing authority
detailed below or have a value less than £10,000. This minimum fee threshold applies only to the services
which the Audit and Risk Committee must approve. There is no minimum threshold for the services
requiring approval from the Group Finance Director or his delegate.
The continuing authority covers the following services:
Audit Services
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Statutory audit assignments, including statutory audits required by law of subsidiaries or affiliates or
otherwise required for the external auditors to issue an audit opinion on the consolidated financial
accounts
Non-audit services1 considered to represent a low threat to auditor independence, being:
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Audit Related Services
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Reporting required by law or regulation to be provided by the auditor
Reviews of interim financial information
Reporting on regulatory returns including audit requirements in respect of the group’s financial
reporting obligations to the telecommunications regulatory bodies
Reporting on government grants
Reporting on internal financial controls when required by law or regulation (when not included in audit
services above)
Extended audit work authorised by the Audit & Risk Committee and performed on the same principle
terms and conditions.
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b) Other Non-Audit Services as below:
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Other services pursuant to requirements of the UKLA, SEC or similar regulatory bodies (when not
included in audit related services above)
Tax compliance work in all applicable territories, including assistance with preparation review and
submission of tax returns and related filings (such as estimated payments, applications for extension of
time, and other disclosures and elections), preparation of supporting documents such as transfer
pricing documentation, responding on BT’s behalf to the tax authorities’ requests for additional
information and analysis, including providing explanations of and technical support for the approach
being taken in the return, assistance in relation to a tax authority audit, investigation or enquiries,
including establishing the relevant facts and analysing the relevant tax law, advice on the tax return
treatment of past transactions and on tax compliance issues generally, advice in relation to a tax
authority assessment and appeal, advice on taxation implications of changes in laws and accounting
standards, in relation to corporation, income, local, employment, VAT, sales, excise, property taxes or
any other taxes in different territories. Including guidance in relation to corporation, income, local,
employment, VAT, sales, excise, property taxes or any other taxes in different territories, to ensure
correct treatment of taxes on tax returns
Tax planning and advisory services in all applicable territories, in relation to corporation, income, local,
employment, VAT, sales, excise, property taxes or any other taxes in different territories, and includes
advice on tax strategy, design of efficient tax processes and controls in order to manage tax liabilities
and include fees for tax advisory services in relation to corporate finance transactions
Due diligence exercises in relation to Corporate Finance activities, in relation to potential acquisitions
and disposals, except to the extent covered in the tax planning and advisory services points above
Human resource advisory services in relation to reward strategy, employment law and share and
pension plans
Providing financial reporting research tools
Providing training courses
Accounting advice (including regulatory reporting and valuation methodology) in relation to new
accounting developments, business developments and complex transactions
Reviews of processes, systems or controls unrelated to the completion of the audit
Financial and business performance benchmarking
Compliance reviews of third party agreements
Investigations and fact finding engagements (including but not limited to disputes and claims support)
but not where the work is carried out with a view to supporting any legal or regulatory adversarial
proceedings.
Assessment and advice on regulatory and economic issues
For other non-audit services included under the continuing authority, if the Group Finance Director or his
delegate considers that the fee is significant in terms of the audit fee, specific approval must be sought
from the Audit & Risk Committee or Audit & Risk Committee Chairman.
In the event that fees for other non-audit services exceed £1,000,000 for individual engagements or
£2,500,000 for the year in aggregate, specific approval is required from the Audit & Risk Committee or
Audit & Risk Committee Chairman (as per paragraphs 3 and 4 of this policy).
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5. Fees for all non-audit services will be reported on a quarterly basis to the Audit & Risk Committee and the
total value of all work will be reported annually to the Board. Where an assignment has been approved by
the Chairman of the Audit & Risk Committee it will be reported to the next meeting of the Audit & Risk
Committee.
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Non-audit services comprise audit related services and other non-audit services.
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