Outlined below is an extract from the Qantas Corporate Governance Statement issued in 2017. The Board safeguards the integrity of financial reporting Audit Committee The Board has an Audit Committee that: has three Members who are Independent Non-Executive Directors; is chaired by Barbara Ward, an Independent Non-Executive Director; has a written Charter which is available on the Corporate Governance page of the Qantas website at http://www.qantas.com.au/infodetail/about/corporateGovernance/AuditCommitteeCharter.pdf; includes Members who are all financially literate; is responsible for assisting the Board in fulfilling its corporate governance responsibilities with regard to financial reporting, audit and risk management, including: - the integrity of the Qantas Group's financial reporting; - compliance with legal and regulatory obligations; - the effectiveness of the Qantas Group's enterprise-wide risk management and internal control framework; and - oversight of the independence of the external and internal auditors. In particular, the Audit Committee undertakes the functions of an audit committee and elements of a risk committee (other than those undertaken by the Safety, Health, Environment and Security Committee) as set out in the ASX Principles. The experience and qualifications of Members of the Audit Committee are contained in the Qantas Annual Report 2017. Membership of and attendance at 2016/2017 Audit Committee Meetings are also detailed in the Qantas Annual Report 2017. The Board and Audit Committee closely monitor the independence of the external auditor. Regular reviews occur of the independence safeguards put in place by the external auditor. As required by section 300(11D)(a) of the Corporations Act and the Audit Committee Charter, the Audit Committee has advised the Board that it is appropriate for the following statement to be included in the 2017 Directors' Report under the heading 'Non-Audit Services': 'The Directors are satisfied that: 1. the non-audit services provided during the 2016/2017 financial year by KPMG as the external auditor were compatible with the general standard of independence for auditors imposed by the Corporations Act 2001; and 2. Any non-audit services provided during the 2016/2017 financial year by KPMG as the external auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: i. KPMG services have not involved partners or staff acting in a managerial or decision-making capacity within the Qantas Group or being involved in the processing or originating of transactions; ii. KPMG non-audit services have only been provided where Qantas is satisfied that the related function or process will not have a material bearing on the audit procedures; iii. KPMG partners and staff involved in the provision of non-audit services have not participated in associated approval or authorisation processes; iv. a description of all non-audit services undertaken by KPMG and the related fees have been reported to the Board to ensure complete transparency in relation to the services v. the declaration required by section 307C of the Corporations Act 2001 confirming independence has been received from KPMG.' Qantas rotates the lead external audit partner every five years and imposes restrictions on the employment of personnel previously employed by the external auditor. Policies are in place to restrict the type of non-audit services which can be provided by the external auditor and a detailed review of non-audit fees paid to the external auditor is undertaken on a quarterly basis. At each meeting, the Audit Committee meets privately with Executive Management without the external auditor, and with the internal and external auditors without Executive Management. The external auditor attends each AGM. Internal Audit The internal audit function is carried out by Group Audit and Risk and is independent of the external auditor. Group Audit and Risk provides independent, objective assurance and consulting services on Qantas' system of risk management, internal control and governance through: maintaining and improving the risk management framework as approved by the Audit Committee; bi-annual risk reporting to the Audit Committee; and performing audits and other advisory services to assure risk management throughout the Qantas Group. Group Audit and Risk adopts a risk-based approach in formulating its audit plan, to align audit activities to the key risks across the Qantas Group. The audit plan is approved by the Audit Committee bi-annually and submitted to the Safety, Health, Environment and Security Committee for information and approval where appropriate. The Audit Committee approves the Group Audit and Risk Internal Audit Charter which provides Group Audit and Risk with full access to Qantas Group functions, records, property and personnel, and establishes independence requirements. The Audit Committee also approves the appointment or replacement of the internal auditor. The internal auditor has a direct reporting line to the Audit Committee and also provides reporting to the Safety, Health, Environment and Security Committee. In addition to Group Audit and Risk, operationally focussed business units within the Qantas Group have their own internal audit functions to provide assurance to accountable managers on the effectiveness of operational risk management and compliance. The findings from these audit activities, along with the status of audit management actions, are reported through operational safety governance structures and to the Safety, Health, Environment and Security Committee. Required Outline seven key strengths of this policy and explain why each one will help the independent auditor do their work.