Based on our understanding of the company and its industry, we identified the main risks of non-compliance with
laws and regulations applicable such as Company Law. We also considered those laws and regulations that have
a direct impact on the preparation of the financial statements, which include Companies Act 2006, Corporation
Tax, Payroll Tax and VAT (sales tax).
We also considered and evaluated the company's management incentives and opportunities for fraudulent
manipulation of the financial statements, including the risk of over riding of internal controls. We determined that
the principal risks for the company was relating to posting inappropriate journal entries to revenue, expenditure
and bias in accounting estimates.
The audit procedures performed by the audit team were as follows:
* Inspecting any correspondence with regulators and tax authorities.
* Evaluating management controls designed to prevent and detect irregularities.
* Dicussing with management and considering of known or suspected instances of non-compliance with laws,
regulations and fraud.
* Challenging management on their assumptions and judgements in regards to their critical accounting estimates.