Independent Auditors’ report continued
How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate. The group comprised 29 legal entities across the UK and Channel Islands during the reporting period. We conducted audit testing over fifteen legal entities, including one entity in the Channel Islands. Across these legal entities, three were considered financially significant due to their contribution to the group’s results, and were subject to an audit of their complete financial information. Together with the audit procedures performed at the group level over the consolidation adjustments, our audit work gave us the evidence we needed for our opinion on the financial statements as a whole. All audit procedures were performed entirely by the group audit team in the UK. The audit of the company Financial Statements was performed entirely by the group audit team in the UK, leveraging on the work performed on the group audit where appropriate with additional audit procedures performed on other company specific balances.
The impact of climate risk on our audit In planning our audit, we considered the extent to which climate change could affect the group and our risk assessment for the audit of the group financial statements. Our work included enquiries of management about their climate-related risk assessment and how it has been implemented. We also obtained the group’s most recent Task Force on Climate-related Financial Disclosures (“TCFD”) report and evaluated its consistency with our knowledge of the group obtained through our audit procedures, and we considered management’s assessment and the TCFD report in the context of our knowledge of the wider asset and wealth management industry. Based on the procedures performed, we concluded that the impact of climate change does not give rise to a key audit matter for the group and did not affect our risk assessment for any material financial statement line item or disclosure. Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements - group
Financial statements - company
Overall materiality £1,154,800 (2024: £1,289,000).
£1,067,150 (2024: £1,272,900).
How we determined it 5% of profit before tax adjusted for non- recurring items being a £3.1 million VAT refund, costs relating to the transition from AIM to the Main Market of £1.9 million, organisational restructuring costs of £2.1 million, acquisition and integration costs of £4.4 million and legacy legal costs of £0.3 million (note 15). Rationale for benchmark applied The most appropriate benchmark for group materiality is adjusted profit before tax (consistent with the prior year) on the basis that the group is primarily measured on its financial performance via its consolidated statement of comprehensive income, adjusted as appropriate for non-recurring items.
1% of net assets
A benchmark of net assets has been used as the company’s primary purpose is to act as a holding company with investments in the group’s subsidiaries, not to generate operating profits and therefore a profit based measure was not considered appropriate. 1% of net assets was the benchmark used in the prior year.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality allocated across components was between £770,000 and £1,097,050. Certain components were audited to a local statutory audit materiality that was also less than our overall group materiality. We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2024: 75%) of overall materiality, amounting to £866,100 (2024: £966,800) for the group financial statements and £800,350 (2024: £954,690) for the company financial statements.
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Brooks Macdonald Group plc Annual Report and Accounts 2025
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