Internal and external audits ensure accurate and responsible reporting.
Risk management supports strategic targets and business objectives and ensures continuity of the operations. To monitor our risk management performance, several auditing processes – both internal and external ones – are in place.
The role of Metso’s internal audit function is to provide independent, objective assurance and consulting services that add value by contributing to the improvement of operations. Internal audit offers a systematic and disciplined approach to evaluate and improve the effectiveness of the organization's governance, risk management and internal control.
The operating principles of internal audit have been defined in the Internal Audit Charter approved by the Board’s Audit Committee. The Audit Committee also approves the annual internal audit plan, which is developed taking into consideration the corporate risk assessment, plans of the business areas and input both from senior management and the Audit Committee. The Head of Internal Audit reports functionally to the Audit Committee and administratively to the CFO.
According to the Articles of Association, Metso has one auditor, which must be a firm of authorized public accountants. The aggregate duration of the consecutive terms of a principal auditor may not exceed seven years. This means that Metso’s principal auditor Mikko Järventausta can act in that capacity until the end of the audit of the 2023 financial period.
According to the EU’s statutory audit directive, the same audit firm can be engaged as the company’s auditor for a maximum period of 10 consecutive years, after which the company must put its auditing out to tender. If the same audit firm is reselected through tendering, it can be re-engaged as the auditor for up to a further 10 consecutive years, after which the audit firm must be changed.
This means that Ernst & Young Oy can act as Metso’s auditor until the end of the 2021 financial year. After this, Metso must put its auditing out to tender. If Ernst & Young Oy is reselected in the tendering, it can be re-engaged as Metso’s auditing firm consecutively until 2031 at maximum, after which Metso must change its audit firm.
The auditor’s statutory obligation is to audit the company’s accounting, financial statements and administration for the financial year. The parent company’s auditor must also audit the consolidated financial statements and other mutual relationships between Group companies. In conjunction with our annual financial statements, the auditor gives Metso’s shareholders an Auditor’s Report as required by law.
The auditor reports primarily via the Audit Committee and at least once a year to the Board. The Audit Committee evaluates the performance and services of the independent auditors each year and decides if there is a need to arrange an open tender process.
Metso pre-approval policy ensures that the Audit Committee monitors and approves all non-audit related services provided by the external auditor, including the scope and estimated fees for these services.
Other risk assessment measures
In addition to Internal and External Audit, there are several other auditing measures in place to secure efficient risk management. More information is available in the Financial Statements for 2017.
In 2018, the following internal audits and risk assessments were conducted:
• Metso Risk Management evaluations, 6 in total
• Internal Audits according to the annual audit plan approved by the Board Audit Committee, 33 in total, with the addition of Whistleblower and other investigations, 38 in total
• Risk engineering audits, 10 in total
The 2018 Annual General Meeting of Shareholders elected Authorized Public Accountant Ernst & Young Oy as the auditor, with Mikko Järventausta as principal auditor. The fees related to auditing work in 2018 amounted to EUR 1.9 million and for tax and other services EUR 0.1 million.
|Auditor's fees, EUR million||2017||2018|
|Other audit related services||0.5||0.1|