Internal and external audit

Internal audit

Internal auditing is an independent, objective assurance and consulting activity designed to add value to and improve Uponor’s operations. Internal audit is an integrated part of Uponor’s internal control framework.

The purpose of Uponor’s internal audit is to support the Board and management in monitoring the effectiveness of internal control, risk management and corporate governance. Internal audit achieves the purpose by having a systematic, disciplined approach to evaluate and improve the aforementioned areas. The purpose of internal audit is also to find and share leading practices within Uponor. In addition to the existing channels within Uponor, internal audit will also serve as a channel through which subsidiaries can notify Uponor’s management about possible wrongdoing/fraud.

The CFO has overall administrative responsibility for the functioning of the internal audit function. As of 1 January 2014, Uponor has outsourced its internal audit function to Ernst & Young Oy.

The operating principles for internal audit are:

• Internal audit plan is prepared for approval by the Audit Committee under supervision of the CFO. Internal audit plan is approved for the period of 12 months. The ExCom may make changes to the audit plan and is obliged to keep the Audit Committee informed of them.
• Written audit reports are issued for each individual audit project. These reports are delivered to the President and CEO and the CFO and, depending on audit target, to other ExCom members. Further, also executives and managers of audited Group companies or functions will receive a copy. A copy of a report will also be send to external auditors.
• Summary reports are presented to the Audit Committee regarding most significant internal audit findings, related risks and management actions.
• Internal auditors meet the Audit Committee once a year in person with no Uponor management present.
• Internal audit work is coordinated with Uponor’s external auditors. In practice, there are bi-annual meetings between internal and external auditors, in which the internal audit plans and results are discussed and shared.
• In 2022, internal audit focused on auditing subsidiaries as well as conducting Group-wide process audits.

In December 2023, the Board resolved to discontinue the previous Audit Committee and transfer its duties to the full Board. The Board noted that according to recommendation 16 of the Finnish Corporate Governance Code 2020 a company shall establish an audit committee, if the extent of the company’s business requires that the preparation of the matters pertaining to financial reporting and control be done by a body smaller than the entire board of directors. The Board further noted that the discontinuance of the Audit Committee means a deviation from the Finnish Corporate Governance Code.
 

External audit

Assisted by the Audit Committee, the Board prepares a proposal on the external auditor and presents it to the AGM for election. The external auditor must be a corporation of authorised public accountants accredited by the Central Chamber of Commerce of Finland. In co-operation with the auditor, the corporate management organises the audit of the Group's subsidiary companies, as required by applicable local legislation. Auditors of these subsidiary companies report directly to the legal unit they have audited, submitting a copy of each report to the Group's financial administration for inclusion in the Company's audit log.

The 2023 AGM appointed KPMG Oy Ab, a corporation of authorised public accountants accredited by the Central Chamber of Commerce in Finland, as the Company's auditor for the financial year 2023, with Anders Lundin, Authorised Public Accountant, acting as the principal auditor.

Fees to the external auditor for the statutory audit services totalled €874,991 and for audit related and other services €16,012 in total €891,003 for the year 2022.