• Governance

Auditor Financial Reporting and the External Auditor

Before being presented to the General Meeting for adoption, the annual Financial Statements as prepared by the Executive Board must be examined by an external certified public auditor. The General Meeting has the authority to appoint the auditor. Each year, the Supervisory Board nominates the auditor for (re)appointment by the General Meeting, taking into account the advice of the Audit and Risk Committee. The Supervisory Board resolves on the auditor’s assignment and remuneration, on the recommendation of the Audit and Risk Committee.

Prior to publication, the half-year results and reports are discussed with the Audit and Risk Committee in the presence of the external auditor, and subsequently with the Supervisory Board. The results and reports of the first and the third quarter are discussed with the Audit and Risk Committee, in the presence of the external auditors, prior to publication. The external auditor attends all Audit and Risk Committee meetings and the meetings of the Supervisory Board in which the annual Financial Statements are to be approved and the year-end audit report of the external auditor is discussed.

The Arcadis Auditor Independence Policy contains rules and procedures for the engagement of the external auditor, in order to ensure its independence.

The Audit and Risk Committee annually reports to the Supervisory Board on the functioning of the external auditor and the relationship with the external auditor, whilst giving due consideration to the Executive Board’s observations.  The desirability of rotating the external auditor’s partners is also evaluated.

Arcadis has an internal audit function which operates under the responsibility of the Executive Board, with reporting lines to the CEO, CFO and the Audit and Risk Committee. The duty of the internal audit function is to assess the design and the operation of the internal risk management and control systems. The scope of work of the internal audit function is regulated in an Internal Audit Charter. Both the appointment and dismissal of the Head of Internal Audit shall be submitted to the full Supervisory Board for approval, with a recommendation issued by the Audit and Risk Committee. The Executive Board, the external auditor and the Audit and Risk Committee are involved in the preparation and approval of the annual internal audit plan. The annual internal audit plan will be submitted to the full Executive Board and Supervisory Board for approval. Internal Audit Reports are discussed with the Executive Board and with the Audit and Risk Committee in the presence of the external auditor.