RELATIONSHIP WITH THE EXTERNAL AUDITOR

 

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 commissioned to the auditors meet the independence requirements stipulated by the Spanish Audit Law 22/2015, July 20, the US SEC rules and the Public Company Accounting Oversight Board (PCAOB).

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 18.72 million euros and 19.11 million euros in 2019 and 2018, respectively.

2019
Millions of euros PwC Auditores, S.L. Other Pwc Total
Audit services 6.92 10.62 17.54
Audit-related services 0.73 0.45 1.18
Tax services --- --- ---
All other services (consulting, advisory, etc.) --- --- ---
Total 7.65 11.07 18.72
2018
Millions of euros PwC Auditores, S.L. Other Pwc Total

Audit services includes audit fees of Telefónica, S.A. individual and consolidated financial statements and its subsidiaries, as well as reviews of interim financial statements. These Audit services also incorporate the integrated audits of the financial statements for the annual report Form 20-F to file with the US SEC for those entities currently required including, therefore, the internal control audit over the financial information to comply with the requirements of the Sarbanes-Oxley 2002 Act (Section 404). Also includes audit work related with legal and regulatory requirements that the auditor must necessarily perform in their function.

Audit-related services: services related to the review of the information required by regulatory authorities, agreed financial reporting procedures not requested by legal or regulatory bodies, the issuance of comfort letters, the report on the information relating to the system of internal control over financial reporting (ICFR), review of Corporate Social Responsibility Reports issued in the Group and Telefónica, S.A.’s limited verification Statement of Non-Financial Information - Efficiency and Trust.

During the years 2019 and 2018, the Principal Auditor has not performed Tax Services or any All other services, other than the Audit services or the Audit-related services in the Group.

PwC Auditores, S.L., has provided the following services to the Group during the years 2019 and 2018 the individual and consolidated financial statements audit, reviews of interim financial statements, the integrated audit of the financial statements for the annual report Form 20-F to file with the US SEC, the internal control audit over the financial information to comply with the requirements of the Sarbanes-Oxley 2002 Act (Section 404), the issuance of comfort letters, agreed financial reporting procedures, the review of Corporate Social Responsibility Reports and the limited verification report of Non-Financial Information Statement- Efficiency and Trust.

Other Audit Firms other than those integrated in the international PwC network, have provided services to the Group, the total amounted to 13.97 million euros in 2019 (22.14 million euros in 2018), the detail of the audit services corresponds to 0.36 million euros in the year 2019 (0.35 million euros in 2018).

Audit services 6.98 11.06 18.04
Audit-related services 0.78 0.29 1.07
Tax services --- --- ---
All other services (consulting, advisory, etc.) --- --- ---
Total 7.76 11.35 19.11