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, and in compliance with the requirements established by the US Securities and Exchange Commission in implementation of the Sarbanes-Oxley Act, 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 expenses accrued in respect of the fees for services rendered to the various member firms of the EY international organization, of which Ernst & Young, S.L. (the auditors of the Telefónica Group) forms part, amounted to 26.47 million euros and 20.94 million euros in 2016 and 2015, respectively.

The detail of these amounts is as follows:

Millions of euros 2016 2015

(1) Audit services: services included under this heading are mainly the audit of the annual and reviews of interim financial statements, work to comply with the requirements of the Sarbanes-Oxley Act (Section 404) and the review of the 20-F report to be filed with the US Securities and Exchange Commission (SEC).

(2) Audit-related services: This heading mainly includes services related to the review of the information required by regulatory authorities, agreed financial reporting procedures not requested by legal or regulatory bodies and the review of corporate responsibility reports.

Audit services (1) 23.37 20.38
Audit-related services (2) 3.10 0.56
Total 26.47 20.94

EY has not rendered tax services or any other service other than those mentioned above to Telefónica Group companies.

The expenses accrued in respect of the fees for services rendered to other auditors in 2016 and 2015 amounted to 34.85 million euros and 52.97 million euros, respectively, as follows:

Millions of euros 2016 2015
Audit services 0.94 1.07
Audit-related services 2.69 2.09
Tax services 8.56 9.31
All other services (consulting, advisory, etc.) 22.66 40.50
Total 34.85 52.97