Due to the nature of our services, it is key for PwC to be independent at all times. Independence is not only at the cornerstone of the quality we deliver to our clients, but it also underpins the trust we give them.
Being independent ensures that we are free of any vested interests, or conflicts of interest, towards our clients when providing services to them. This is particularly important in relation to our Audit and Assurance services. If we are not independent, our activities cannot be rendered in a compliant manner, compromising the quality of our services and the trust our clients, their stakeholders as well as the general public can have in our services. An independence failure would have a negative impact internally, and externally on society.
Independence as such remains a key topic for PwC. In order to be a responsible, long lasting firm and achieve our purpose of “building trust in society and solving important problems”, we have appropriate tools and processes in place to comply with applicable independence rules and provide support to businesses and staff.
Applying the CES+ Tool to safeguard our clients’ independence
The Central Entity Service (CES+) tool is a system that includes the independence status of all our current and future audit clients, as well as our other clients. CES+ gives a quick overview of the potential restrictions, permitted and/or restricted services on an entity and feeds into the Authorisation for Services (AFS) tool. The AFS tool guarantees relevant independence rules and approval requirements before providing a service. It confirms what we are and are not allowed to do for a client when we render their services; and defines securities and banking relations we can have with our clients and non-clients.
Every time we enter a new business relationship or engagement with a client, our teams are required to use the CES+ tool to check whether the client is subject to any service restrictions and to determine the permitted services that we can offer. It is for these reasons that CES+ needs to be up to date at all times. If it is not updated, there is a high risk of non-compliance of the firm, both at a local and global PwC level.
Independence Trainings and Confirmations
PwC Luxembourg provides all Partners and staff with annual or on-going training in independence matters. Training typically focuses on milestone training relevant to a change in position or role, changes in policy or external regulation and, as relevant, provision of services.
All Partners and staff are required to complete an annual compliance confirmation, whereby they confirm their compliance with relevant aspects of the member firm’s independence policy, including their own personal independence.
In addition, all Partners confirm that all non-audit services and business relationships for which they are responsible comply with policy and that the required processes have been followed in accepting these engagements and relationships. These annual confirmations are supplemented by periodic and ad-hoc engagement level appropriate confirmations which have to be provided by all Partners and Staff as soon as they render any kind of services to clients.
Independence Monitoring
Our Firm is responsible for monitoring the effectiveness of its quality control system in managing compliance with independence requirements. In addition to the confirmations described above, as part of this monitoring, we perform:
- Compliance testing of independence controls and processes;
- Personal independence compliance testing of a random selection of, at a minimum, Partners; Directors and Managers as a means of monitoring compliance with independence policies; and
- An annual assessment of the member firm’s adherence with the PwC Network’s Standard relating to independence.
The results of our Firm’s monitoring and testing are reported to the firm’s management on a regular basis with a summary reported to them on an annual basis. We also have disciplinary policies and mechanisms in place that promote compliance with independence policies and processes, and that require any breaches of independence requirements to be reported and addressed.
Conflict of Interest
In addition to being independent, our business judgment is also free from bias, conflicts of interest or undue influence of others. In this context, we refer to “conflict of interest” from a personal or employee perspective rather than from the organisation as a whole. PwC employees can find themselves in a conflict of interest if they have a financial interest, personal activity, or relationship that could impair their ability to act impartially and in the best interest of PwC Luxembourg while employed with us.
We follow processes and procedures to identify and address any actual or potential conflicts of interests, which are in line with PwC’s Code of Conduct. Our Code of Conduct reinforces the importance of conducting business within the framework of professional standards, laws, and regulations, together with our own policies, values, and standards, even as we work across borders. It as such, outlines the values and behaviours that define how we do business. For further information on how we conduct a responsible business, please view our Legitimacy and Ethics chapter.
This material makes reference to GRI disclosures 102-16 ; 102-25
This material makes reference to GRI disclosures 102-44 ; 102-46a ; 102-46b ; 102-47 ; 103-1 ; 103-2 ; 103-3
