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 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non compliance with laws and regulations, our procedures included the following:
· We obtained an understanding of the legal and regulatory frameworks applicable to the company and the sector in which they operate. We determined that the following were the most significant: the Companies Act 2006 and UK corporate taxations laws.
· We obtained an understanding of how the company are complying with those legal and regulatory frameworks by making inquiries to the management of the company. We corroborated our inquiries through our review of correspondence during our audit work.
· We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed included:
· identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
· understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
· challenging assumptions and judgements made by management in its significant accounting estimates;
· identifying and testing journal entries, in particular journal entries posted with unusual account combinations; and
· assessing the extent of compliance with the relevant laws and regulations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.