Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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:
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance
with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the
Company’s remuneration policies, key drivers for directors' remuneration, bonus levels and performance targets.
• results of our enquiries of management about their own identification and assessment of the risks of irregularities.
• any matters we identified having obtained and reviewed the Company's documentation of their policies and
procedures relating to
• identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of
noncompliance.
• detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or
alleged fraud,
• the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
• the matters discussed among the audit engagement team and involving relevant internal specialists, including tax
and IT specialists regarding how and where fraud might occur in the financial statements and any potential
indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in relation to revenue deferrals. In common with
all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing
on provisions of those laws and regulations that had a direct effect on the determination of material amounts and
disclosures in the financial statements. The key laws and regulations we considered in this context included the UK
Companies Act and local tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the Company's ability to operate or to avoid a
material penalty.
Audit response to the risks identified
Our procedures to respond to risks identified included the following:
- reviewing the financial statement disclosures and verifying through obtaining supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect on the financial
statements.
• enquiring of management and external legal counsel concerning actual and potential litigation and claims.
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of
material misstatement due to fraud.
• reading minutes of meetings of those charged with governance and reviewing regulatory correspondence.
• obtained an understanding of provisions and held discussions with management to understand the basis of
recognition or non-recognition of tax provisions; and
• obtained an understanding of provisions and held discussions with management to understand the basis of
recognition or non-recognition of tax provisions; and in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the
judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members including internal specialists and significant component audit teams and remained alert to any indications
of fraud or noncompliance with laws and regulations throughout the audit.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of
the Auditors.