The minimum responsibilities of the Audit and Control Committee include that of putting forward proposals to the Board of Directors for submission to the General Shareholders Meeting regarding the appointment of the Auditors referred to in Section 264 of the Companies Act (Ley de Sociedades de Capital), the terms under which they are hired, the scope of their professional remit, and the termination or renewal of their appointment. Likewise, the Committee must liaise with the Auditors in order to receive information on any issues that might threaten the latter’s independence, and any others connected with the auditing procedure, and to receive information and to maintain with the Auditors the communications envisaged in audit legislation and in the technical auditing regulations.
In this manner, the Board of Directors establishes through the Audit and Control Commission a stable and professional relationship with the Company’s Accounts Auditor, strictly respecting his independent nature.
In addition, in compliance with the requirements established by the Audit Account Act, the European Regulation, the Sarbanes-Oxley Act published in the United States and its development regulations, Telefónica’s Audit and Control Committee approved an internal regulation to submit the provision of any type of service by the Company’s external auditors to the Commission for approval.
Auditors’ fees
The services entrusted to the auditors comply with the independence requirements established by the Spanish Audit Law 22/2015 of July 20, as well as with the rules of the Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), both of the United States of America.
The expenses accrued by the Group, in respect of the fees for services rendered to the various member firms of the PwC network, of which PricewaterhouseCoopers Auditores, S.L. (“PwC Auditores, S.L.”), the auditors of Telefónica, S.A., forms part, amounted to 20.02 million euros and 20.07 million euros in 2023 and 2022, respectively.
The detail of these amounts is as follows:
2023
| Millions of euros | PwC Auditores, S.L. | Other companies PwC network | Total |
|---|---|---|---|
| Audit services | 8.13 | 10.48 | 18.61 |
| Audit-related services | 1.01 | 0.40 | 1.41 |
| Total | 9.14 | 10.88 | 20.02 |
2022
| Millions of euros | PwC Auditores, S.L. | Other companies PwC network | Total |
|---|---|---|---|
| Audit services | 7.73 | 10.98 | 18.71 |
| Audit-related services | 0.99 | 0.37 | 1.36 |
| Total | 8.72 | 11.35 | 20.07 |
Audit services include audit fees with respect to the individual and consolidated financial statements of Telefónica, S.A. and its subsidiaries, as well as the review of interim financial statements. These Audit services also include the integrated audit of the financial statements for the annual report on Form 20-F filed with the US SEC for those entities currently required, including therefore, the audit of the internal control over financial reporting to comply with the requirements of the Sarbanes-Oxley Act of 2002 (Section 404). It also includes audit work related to legal and regulatory requirements that the auditor is required to perform as part of its role.
The main items included in Audit-related services relate to the review of financial information required by regulators, the issuance of agreed-upon procedures reports on financial reporting, the verification of non financial information in annual reports, the issuance of comfort letters, the review of allocation and impact reports of green finance instruments, the special report on the Solvency and Financial Condition Review under the Solvency II regulatory framework and the reasonable assurance report on the system of Internal Control over Financial Reporting (ICFR).
In 2023, the Principal Auditor has performed services other than those mentioned above for a total amount of 0.002 million euros. During 2022, the Principal Auditor did not provide any services in the Group other than audit or audit-related services.
PwC Auditores, S.L., has provided the following services to the Group in 2023 and 2022: the individual and consolidated financial statements audit, the review of interim financial statements, the integrated audit of the financial statements for the annual report on Form 20-F filed with the US SEC, the audit of the internal control over financial reporting in order to comply with the requirements of the Sarbanes-Oxley Act of 2002 (Section 404), the verification of non-financial information in the annual reports, the issuance of comfort letters, the issuance of agreed upon procedures reports on financial reporting, the review of allocation and impact reports of green finance instruments, the special report on the Solvency and Financial Condition Review under the Solvency II regulatory framework and the reasonable assurance report on the system of Internal Control over Financial Reporting (ICFR).
The expenses accrued to other audit firms, which are not part of the international PwC network and which have provided audit services to the companies included in the consolidation of the Group for the year 2023 have amounted to a total of 1.77 million euros (1.46 million euros in 2022), the details of the audit services correspond to 0.94 million euros (0.83 million euros in 2022).
