Terms of Reference of the Audit Committee (the “AC”), a committee of the Supervisory Board (the “SB”) of PricewaterhouseCoopers LLP (the “Firm”)

Purpose and Authority

1. The AC has delegated authority from the SB. The primary purpose of the Committee is to provide assistance to the SB in fulfilling its role and responsibilities as set out in the Members’ Agreement with respect to matters involving the accounting, auditing, financial reporting and internal control functions of the Firm.
2. The AC may investigate any activity (within these Terms of Reference and within its scope of responsibilities), to seek any information it requires and to ensure the attendance of management representatives at meetings as appropriate.
3. The AC has the authority to obtain outside legal or independent professional advice. The advisers may attend meetings as necessary and the cost of the advisers shall be borne by the Firm.

Chair

1. The Chair of the AC is nominated by the Chair of the SB for a term not exceeding two years, and approved by the SB. In the absence of the Chair at any AC meeting, the members present shall appoint an SB member in attendance as Chair of the meeting. The INE member of the Committee will not act as Chair of Committee meetings.

Secretary

1. The Secretary to the AC is Sharan Sawhney, a member of the Board Secretariat. In the absence of the Secretary, another member of the Board Secretariat of the Firm may act as Secretary of the AC.
2. The Secretary will ensure that the AC receives information and papers in a timely manner to enable full and proper consideration to be given to matters, and will be responsible for maintaining accurate records of meetings.

Decisions of the AC

1. A decision of the AC taken by vote shall require a Simple Majority. The Chair will have the casting vote. Any formal approvals by the Committee will be made by the SB members of the Committee, having consulted with the INE member of the Committee to understand their views.

Notice of Meetings

1. Meetings of the AC will be called by the Secretary at the request of the Chair, by any of the AC members, or in accordance with para. 8.1, with notice of such meetings being provided at the earliest opportunity.
2. Unless otherwise agreed, notice of each AC meeting confirming the venue, time and date together with an agenda of items to be discussed, shall be forwarded to each AC member in a timely manner. Supporting papers shall be sent to the AC members and other attendees, as appropriate, at the same time.

Duties, Powers and Responsibilities

1. External Audit
   1. To assess annually the qualification, expertise and resources, and independence of the external auditor, taking account of relevant Ethical Standards and ensuring that key partners are rotated at appropriate intervals;
   2. To assess annually the effectiveness of the audit process;
   3. To review with management the audit fee and audit engagement letter and to ensure that the provision of non‑audit services does not impair the external auditor’s independence or objectivity;
   4. To develop and implement a policy on the supply of non‑audit services by the external auditor and to agree with management a policy on the employment of former employees of the firm’s external auditor and monitor its implementation;
   5. To discuss with the external auditor, before the audit commences, the nature and scope of the audit and to review the auditor’s quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements;
   6. To make appropriate recommendations, if considered necessary, to the designated members regarding the continuation of the external auditor, to oversee the selection process for new auditors and, if an auditor resigns, to investigate the issues leading to this and decide whether any action is required;
   7. To consider the need to include the risk of withdrawal of the external auditor from the market in the Committee’s risk assessment process; and
      
   8. To review the external auditor’s management letter and management’s response.
2. Internal controls and internal audit
   1. To review the effectiveness of the firm’s internal control framework;
   2. To monitor and review the effectiveness of the internal audit function including:
      1. to consider with management the appointment of the Head of Internal Audit;
      2. to annually approve the Internal Audit charter;
      3. to seek assurance as it may deem appropriate that the function is independent, adequately resourced and has appropriate standing within the firm;
      4. to review, challenge and approve the internal audit plan and budget annually with consideration for the firm’s risk profile;
      5. to review on a quarterly basis the results of the Internal Audit reviews performed; and
      6. to monitor the satisfactory performance of Internal Audit.
   3. To consider management’s response to any recommendations made by the external auditor or internal audit and review with internal audit and the external auditor any fraudulent or illegal acts, deficiencies in internal control or other similar issue, including reviewing the results of management’s investigation and follow up of any fraudulent acts.
3. Annual financial statements
   1. To review, and challenge where necessary, the actions and judgements of management in relation to the annual financial statements, paying particular attention to:
      1. critical accounting policies and practices, and any changes in them;
      2. decisions requiring a major element of judgement;
      3. the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;
      4. the clarity of disclosures;
      5. significant adjustments resulting from the audit;
      6. the calculation of partners’ distributable profit;
      7. the going concern assumption;
      8. compliance with accounting standards and related guidance; and
      9. compliance with other legal requirements.
   2. To review management’s statement on internal control systems prior to endorsement by the Executive Board (under delegated authority from the MB), the effectiveness of the firm’s internal control systems and procedures for compliance and whether management has discharged its duty to have an effective internal control system;
   3. To review tax compliance and tax planning initiatives of the firm;
   4. To review the letter of representation prior to management sign off; 
   5. To review and to provide advice on whether the Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary to assess the company’s performance, business model and strategy;
   6. To review the firm’s Annual Transparency Report; and
   7. To review the firm’s Annual Sustainability Report.
4. Other matters
   1. To perform other oversight functions, as requested by the SB.
5. Reporting Responsibilities
   1. The committee chair shall report formally to the SB on its proceedings on all matters within its duties and responsibilities. The committee chair will also provide updates to the PIB.
   2. The committee shall escalate and make whatever recommendations to the SB it deems appropriate on any area within its responsibilities.

Approved by the Supervisory Board on 19 November 2024.

^{Notes
[1] The responsibilities of the PIB are set out in its Terms of Reference}