Internal Audit is a fundamental part of Metso’s corporate governance and management systems. Internal Audit assists the Board in supervising the Company. 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 and Risk Committee. The Audit and Risk Committee also approves the dynamic Internal Audit plan, which is developed taking into consideration the corporate risk assessment, business area plans, and input from senior management and the Audit and Risk Committee. The plan is reviewed and revised when necessary. Audit findings, recommendations and management corrective actions are reported regularly to the Audit and Risk Committee. The Head of Internal Audit reports functionally to the Audit and Risk Committee and administratively to the CFO.
In 2022, Internal Audit performed 20 audits and supported the Compliance organization in Whistleblower and other investigations, facilitated internal control self-assessments and participated in various internal control development projects, for example related to the on-going ERP Business Program. The internal audits focused on the following areas: information security and access management, usage of third parties in sales and other key areas of the internal control framework, such as procurement and sales.
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 (Ernst & Young) can act in that capacity until the end of the audit of the 2026 financial period.
According to the EU 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 10 additional consecutive years, after which the audit firm must be changed. Ernst & Young started their term as the auditor of Metso during the financial period 2020.
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 submits the statutory Auditor’s Report to Metso’s shareholders.
The auditor reports regularly to the Audit and Risk Committee and at least once a year to the Board. The Audit and Risk Committee evaluates the performance and services of the auditors each year and annually prepares a proposal on the auditor selection to the Annual General Meeting.
Metso’s pre-approval policy ensures that the Audit and Risk Committee monitors and approves all non-audit-related services provided by the external auditor, including the scope and estimated fees for these services.