8 Independent auditors

8.1 Duration of mandate and term of office of the auditor in charge

8.1.1 Date of acceptance of existing auditing mandate

PricewaterhouseCoopers AG, St. Gallen has served as the independent auditors of the Liechtensteinische Landesbank according to company and banking law since 1998. The auditing mandate was taken over in 1998 from Revisuisse Price Waterhouse AG, St. Gallen and its predecessor Revisa Treuhand AG, St. Gallen. Pursuant to person and company law and banking law, the independent auditors are appointed by the General Meeting at the proposal of the Board of Directors for the period of one year.

8.1.2 Term of office of the auditor in charge of the current auditing mandate

Roman Berlinger has been the responsible auditor in charge since 2011. The auditor in charge changes every seven years.

8.2 Audit fees

In the 2011 business year, PricewaterhouseCoopers AG invoiced the companies of the LLB Group for CHF 2.7 million (2010: CHF 2.4 million) in respect of audit fees. These fees include the work carried out by the auditors as required by the regulatory authorities. The Group Audit & Risk Committee oversees the fees paid to PricewaterhouseCoopers AG for their services.

8.3 Additional fees

For other services, PricewaterhouseCoopers AG invoiced the companies of the LLB Group for CHF 0.5 million in 2011 (2010: CHF 0.6 million).

Audit fees and additional fees

(XLS:)

 

 

 

in CHF thousands

2011

2010

Audit fees

2'743

2'381

Additional fees

525

615

International accounting

55

59

Taxation advice

110

95

Regulatory issues and questions

67

129

Project consulting IT platform

62

273

Legal and other advice

231

59

8.4 Information instruments of the external auditors

The Group Audit & Risk Committee fulfils a supervisory, control and monitoring function, which extends to the external auditors. It is responsible, among other tasks, for:

  • taking note and discussing the risk analysis made by the external auditors, the auditing strategy derived from it and the respective risk-oriented auditing plan;
  • the critical analysis of the audit reports submitted by the external audit and the Group Internal Audit functions to the Group Board of Directors;
  • discussing serious problems identified during the auditing process with the external auditors;
  • the monitoring and implementation of recommendations put forward by the external auditors and Group Internal Audit to eliminate weak points and deficiencies;
  • assessing the quality of the external and internal audit functions (external and internal auditors according to banking law and person and company law), as well as their cooperation;
  • discussing the annual activity report and the annual audit plan of Group Internal Audit including the evaluation of whether this function has sufficient resources and competences, as well as approving proposals to the Group Board of Directors;
  • assessing the qualification, independence, objectivity and performance of the external auditors and Group Internal Audit;
  • checking the reconcilability of external auditors' auditing activities with possible consulting mandates, as well as evaluating and discussing their professional fees;
  • submitting a proposal to the Group Board of Directors for the attention of the General Meeting regarding the appointment or dismissal of the external auditors (appointed according to banking law and person and company law). The Group Audit & Risk Committee is responsible for defining the procedure to appoint new external auditors.

The external auditors perform their work in accordance with the legal provisions, and according to the principles of the profession in the respective country of domicile of the Group company, as well as according to the «International Standards on Auditing». The independent auditors regularly report to the Board of Directors, the Group Audit & Risk Committee and the Board of Management about their findings and submit suggestions for improvements to them. The most important report is the audit report on the LLB Group required by banking law. This summarized report is submitted in writing once a year to the Board of Directors. In addition, the responsible auditor in charge of the external auditors presents a report at one meeting of the Group Audit & Risk Committee. All reports from the internal and external auditors concerning all Group companies are submitted to the Group Audit & Risk Committee.

Important findings in the reports of the internal and external auditors since the last meeting and all reports concerning the Group companies are addressed at the next meeting of the Group Audit & Risk Committee. The head of Group Internal Audit is responsible for providing the relevant information and reports directly to the Group Audit & Risk Committee. He is appointed by the Board of Directors and is subordinate to the Board's Chairman.

Representatives of the external auditors participated in two meetings of the Group Audit & Risk Committee but did not attend any meetings of the full Board of Directors during the report period. The head of Group Internal Audit attended all but one of the meetings of the Group Audit & Risk Committee and all but one of the meetings of the full Board of Directors. The external auditors submit periodic reports dealing with the audit planning based on risk analysis, the current audit reporting, the annual activity report as well as a comparison of actual to budgeted fees.

The Group Audit & Risk Committee evaluates the performance of the external and internal auditors in their absence annually. The following criteria are applied in assessing the performance of the external auditors and their professional fees (auditing and additional fees): comparison of fees and budgeted fees as well as the previous year's fees, feedback from the departments audited, quality of the auditors' findings, structured assessment of the auditors' expertise. The independence of the external auditors is evaluated on the basis of the information concerning independence provided in the annual report of PricewaterhouseCoopers AG, and an assessment of their conduct. The cost planning and its observance are also reviewed and discussed annually. Moreover, the Group Audit & Risk Committee annually reviews alternatives and submits a proposal to the full Board of Directors for the attention of the General Meeting regarding the appointment of the external Group auditors.

Additional orders are placed on the basis of offers from competitors taking into consideration the level of expertise. The Group Audit & Risk Committee bases its assessment regarding the placing of orders for additional services on the periodic reports it receives from Group Internal Audit regarding the reliability, scope and relationship to audit fees.

The Group Audit & Risk Committee reports to the full Board of Directors once a year concerning the activities of the external auditors and the assessment of their performance.

The external auditors have direct access to the Board of Directors at all times. They hold regular discussions with the Chairman of the Board of Directors and the Chairman of the Group Audit & Risk Committee. Topics in 2011 included:

  • analysis and evaluation of risks;
  • auditing strategy and auditing plan;
  • implementation level of auditing recommendations;
  • discussion of important audit findings;
  • areas of judgement in the annual financial statement;
  • developments in accounting;
  • determination of auditing fee;
  • evaluation of work of independent auditors;
  • cooperation between internal and external audit.
top of page