Anglo American Annual Report 2012

Audit Committee actionsin 2013During 2013 the Audit Committeewill continue its role in monitoring theintegrity of the financial statementsand reviewing the effectivenessof the Company’s internal controland risk-management systems.An item of key interest to the AuditCommittee will be to satisfy itselfthat the risk and audit processes withinDe Beers are fully integrated intoAnglo American as appropriate.Consideration given tothe appointment of theexternal auditorsThe appointment of Deloitte LLPas the Group’s external auditors(incumbents since the listing ofAnglo American in 1999) is kept underannual review and, if satisfactory,the Committee will recommend there-appointment of the audit firm.The appointment of Deloitte LLPfollowed a detailed evaluation,at the time of the listing, of thepredecessor audit firms and, ratherthan adopting a policy on tenderingfrequency, an annual review of theeffectiveness of the external auditis supplemented by a periodic,comprehensive reassessment bythe Committee. The Committee’sassessment of the external auditors’performance and independenceunderpins its recommendation to theBoard to propose to shareholdersthe re-appointment of Deloitte LLPas auditors until the conclusion of theAGM in 2014. Resolutions to authorisethe Board to re-appoint and determinethe remuneration of Deloitte LLPwill be proposed at the AGM on19 April 2013.The role of internal auditThe Group has an internal auditdepartment that reports centrallywith responsibility for reviewing andproviding assurance on the adequacyof the internal control environmentacross all of Anglo American’soperations.The head of internal audit isresponsible for reporting and followingup on the findings of this internal auditwork with local management and theAudit Committee on a regular basis.Internal audit teams operated in all theGroup’s principal divisions in the periodunder review, reporting findings tolocal senior management. The internalaudit function’s mandate and annualaudit coverage plans have beenapproved by the Audit Committee.The internal audit activities areperformed by teams of appropriate,qualified and experienced employees,supplemented if necessary throughthe engagement of externalpractitioners upon specified andagreed terms. A summary of auditresults and risk managementinformation was presented to theCommittee and Group seniormanagement at regular intervalsthroughout the year. The Group’shead of internal audit reports to theAudit Committee on the internalaudit function’s performance againstthe agreed internal audit plan.During 2012, 440 audit projects werecompleted covering a varietyof financial, operational, strategicand compliance-related businessprocesses across all business unitsand functions. In addition, the internalaudit department responded to anumber of management requeststo investigate alleged breaches ofour business principles. During 2013the internal audit resources inDe Beers will be integrated into theAnglo American team and will adopta consistent approach to internalaudit work.Assessment of the effectivenessof internal control and riskmanagementThe GMC, as mandated by the Board,maintains a Group-wide system ofinternal control to manage significantGroup risks.This system, which has been operatingthroughout the year and to the dateof this report, supports the Board indischarging its responsibility forensuring that the wide range of risksassociated with the Group’s diverseinternational operations is effectivelymanaged in support of the creationand preservation of shareholderwealth. Please see pages 48–53 forfurther information on the key riskfactors Anglo American is exposed to.Where appropriate, necessary actionhas been or is being taken to remedyany failings or weakness identified as aresult of the review of the effectivenessof the internal control system.GovernanceAnglo American plc Annual Report 2012 105