9.1 Selection process, duration of mandate and term of office of the Auditor-in-charge
The principles for appointing the statutory auditor have been set forth in a policy by the Board of Directors. A new tender is issued for the statutory auditor’s mandate at least every 10 to 14 years. The statutory auditor’s tenure is limited to 20 years. The Audit Committee steers the selection process, defines transparent selection criteria and submits two proposals accompanied by a substantiated recommendation in favour of one audit firm to the Board of Directors. The last tendering process was launched in 2007 with effect from the 2008 financial year. The next tendering process will be launched by 2021 at the latest with effect from the 2022 financial year.
KPMG AG, Muri bei Bern, has acted as the statutory auditor of Swisscom Ltd and its Group companies (with the exception of Fastweb S.p.A, which is audited by PriceWaterhouseCoopers S.p.A.) since 1 January 2004. Hanspeter Stocker of KPMG AG has been responsible for the mandate as Auditor-in-charge since 2015.
9.2 Audit fees
Fees for auditing services provided by KPMG AG in 2016 amounted to CHF 3,239 thousand (prior year: CHF 3,413 thousand). PricewaterhouseCoopers S.p.A. as auditors for Fastweb received remuneration of CHF 768 thousand in 2016 (prior year: CHF 678 thousand).
9.3 Supplementary fees
Fees of KPMG AG for additional audit-related services amounted to CHF 283 thousand (prior year: CHF 201 thousand) and the fees for other services came to CHF 127 thousand(prior year: CHF 1,533 thousand). The supplementary fees primarily comprise tax advisory services. Fees of PricewaterhouseCoopers S.p.A. for additional audit-related services for Fastweb amounted to CHF 112 thousand (prior year: CHF 155 thousand).
9.4 Supervision and controlling instruments vis-à-vis the auditors
The Audit Committee verifies the qualifications and independence of the statutory auditors as a licensed, state-supervised auditing firm as well as the quality of the audit services performed on behalf of the Board of Directors. It is also responsible for observing the statutory rotation principle for the Auditor-in-charge and for reviewing and issuing the new tender for the audit mandate. The Audit Committee approves the integrated strategic audit plan, which includes the annual audit plan of both the internal and external auditors, and the annual fee for the auditing services provided to the Group and Group companies. The Audit Committee has defined guidelines for additional service mandates (including a list of prohibited services). It has also set a threshold for fees charged for additional services, which is defined as a percentage of the audit fees. In order to ensure the independence of the auditors, additional assignments must be approved by the CFO of the local Group company or by the Audit Committee (where the fee exceeds CHF 300,000). The Audit Committee is reported to quarterly by the CFO and annually by the auditors on current mandates being performed by the auditors, broken down according to audit services, audit-related services and non-audit services. The statutory auditors, represented by the Auditor-in-charge and his deputy, usually attend all Audit Committee meetings. They report to the Committee in detail on the performance and results of their work, in particular regarding the annual financial statement audit. They submit a written report to the Board of Directors and the Audit Committee on the conduct and results of the audit of the annual financial statements, as well as on their findings with regard to accounting and the internal control system. The Chairman of the Audit Committee liaises closely with the Auditor-in-charge beyond the meetings of the Committee and regularly reports to the Board of Directors.