Our responsibility is to conduct an audit of the company's financial statements in accordance with International Standards on Auditing (UK) and to issue an auditor's report. However, because of the matters described above in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.
We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Detection of Irregularities
Our objective was to obtain reasonable assurance about whether the financial statements as a whole were free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We designed procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. We identified the laws and regulations applicable to the company through discussions with directors and other management and from our commercial knowledge and experience of the education sector. We focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, UK GAAP, FRS102 in particular. We also considered other laws and regulations where non-compliance could have a material impact on the amounts or disclosures in the financial statements. For example, the requirements of OFSTED. We assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and ensuring proper policies and procedures are in place. Moreover, the laws and regulations were communicated to the audit team, who remained alert to instances of non-compliance throughout the audit. We also assessed the susceptibility of the company's financial statements to material misstatement by making enquiries of management as to where they considered there was a susceptibility to fraud, their knowledge of actual or suspected frauds and through a consideration of the internal controls that might mitigate the risk of fraud and non-compliance with laws and regulations. To address the risk of fraud through management bias and the override of controls, we performed substantive testing of material balance sheet assets and liabilities. We also sought to complete revenue, expenses and payroll testing but were unable to test pre-acquisition expenses as the relevant purchase invoices had not been retained in full. In addition to the limitations that resulted from the paucity of pre-acquisition documentation, there are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment or collusion.