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Annual Review 2004/05
Reports on compliance and regulatory matters

2. Report of the independent auditors to the Governors of the British Broadcasting Corporation (BBC)

We have audited the financial statements.

This report is made solely to the BBC's Governors, as a body, in accordance with the Royal Charter for the continuance of the BBC which came into force on 1 May 1996 (the Charter) and the Financial Memorandum with the Foreign and Commonwealth Office. Our audit work has been undertaken so that we might state to the BBC's Governors those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the BBC and the BBC's Governors as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the Governors and BBC World Service Management Board and auditors

The Governors and Management Board are responsible for preparing the Annual Review including, as described above, the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibilities as independent auditors are established in the United Kingdom by statute, by the Auditing Practices Board, our profession's ethical guidance and, in accordance with the terms of our appointment, the Companies Act 1985 and the Charter.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, BBC World Service has not kept proper accounting records, if we have not received all the information and explanations we require for our audit or if information specified by law regarding Management Board remuneration and transactions with BBC World Service is not disclosed.

In addition to our audit of the financial statements, the Governors and Management Board have instructed us to review their corporate governance statement as if BBC World Service were required to comply with the Listing Rules of the Financial Services Authority in relation to these matters. We review whether the corporate governance statement reflects BBC World Service's compliance with the seven provisions of the Combined Code specified for audit review by those rules, and we report if it does not. We are not required to form an opinion on the effectiveness of BBC World Service's corporate governance procedures or its internal controls.

We read the other information contained in the Annual Review, including the corporate governance statement, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.

Basis of audit opinion

We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the Governors and Management Board in the preparation of the financial statements and of whether the accounting policies are appropriate to BBC World Service's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.


In our opinion the financial statements give a true and fair view of the state of affairs of BBC World Service at 31 March 2004 and of the surplus of BBC World Service for the year then ended and have been properly prepared in accordance with the provisions of the BBC's Charter and Agreement, the Financial Memorandum and the provisions of the Companies Act 1985 as if those provisions had applied to these financial statements.

Chartered Accountants, Registered Auditor, London
16 June 2005

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