Telecom Adopts Revised Audit Independence Policy

Telecom Adopts Revised Audit Independence Policy

The Board of Telecom New Zealand today announced the adoption of a revised audit independence policy, which significantly constrains the ability of Telecom’s external auditors to provide non-audit services.

As a result, current auditors PriceWaterhouseCoopers have agreed to resign immediately following completion of the audit of Telecom’s 2001-2002 financial year results, and instead concentrate on the provision of non-audit services to the Company.

Telecom will appoint KPMG as its auditors for the 2002-2003 financial year.

Board Chairman, Dr Roderick Deane, said the revised policy would ensure that audit independence is maintained, both in practice and in public appearance.

Telecom had thoroughly revised its audit policy to ensure it reflected international best practice in a range of areas including such matters as rotation of auditors and non-recruitment of senior personnel from audit firms as well as clearly separating audit and non-audit functions, Dr Deane said.

“Telecom’s external financial reporting has always been viewed as highly reliable and credible. Of our own initiative we have made this change to further enhance that reputation, and provide ongoing assurance to our shareholders that audit independence is clearly maintained.

“The decision to appoint KPMG has been made in accordance with our revised audit policy.”

Dr Deane said the decision did not reflect any concern whatsoever with the performance of Telecom’s previous auditors, PriceWaterhouseCoopers.

“On the contrary, PriceWaterhouseCoopers has always shown a high level of professionalism, independence and integrity in performing the Company’s audits over a considerable period of time.

“They will continue to carry out major assignments with Telecom on non-audit related matters including financial and taxation advisory services.

“This change has been made only from an overall governance point of view, to demonstrate transparently the independent role of Telecom’s auditors.”

ENDS

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