3 Corporate Governance Report
Significant issues considered by the ARC when reviewing the financial statements and how each was addressed is summarised as follows: Issue Compliance with regulatory standards and all relevant law
Resolution Self-assessment of compliance with regulatory standards. • Schedule of relevant law and, for each piece of legislation, the completion of a summary by a subject matter expert setting out how it applies to Anchor and what we do to ensure compliance. • Improvement actions which are identified and tracked year on year. • ARC’s own regular deep dives into areas of interest which include in each case a consideration of applicable legislation and regulation and how we comply. • Self-assessment of compliance against the Code. • An internal audit of compliance against the Code was carried out in 2023 and offered a good level of assurance that compliance could be evidenced or explained appropriately. • A report from management which highlighted no material issues and no material adjustments required. • A report from auditors BDO LLP supporting management’s view. • Anchor’s long term fin ancial plan and associated stress testing which indicates a robust and resilient financial position for the Going Concern period and beyond. • Anchor’s V1 viability grading from the Regulatory or Social Housing • Anchor’s A+ stable credit rating from Standard & Poor’s • A draft report was received from BDO LLP which challenged the use of the going concern basis but concluded that the audit opinion was unmodified in relation to going concern.
Compliance with the UK Corporate Governance Code
Board responsibility for preparing accounts which are fair, balanced and understandable
Rationale for preparing accounts on a Going Concern basis
• External audit testing indicated that controls were operating effectively.
Judgemental items and estimates used in the preparation of the accounts Viability assessment beyond the Going Concern period was carried out on key risks including: • Management override of controls. • Fraud risk due to improper revenue recognition through inappropriate journal entries. • Risk of impairment on specific developments where net realisable value is lower than stock cost. The risks and mitigations set out in the draft external audit report from BDO LLP. Audit testing
• Report from management setting out the accounting judgements and estimates used in preparation of the accounts including rationale and risks. • Long Term Financial Plan demonstrates viability over a 30 year period, with particular emphasis on the next 5 years. • Stress testing of the Long Term Financial Plan concluding that Anchor has a robust financial position. • Anchor follows the UK GAAP, FRS 102, and the Housing SORP 2018 which state that the carrying value of an asset should be compared to the recoverable amount for that asset. Management reported to the ARC on how this principle has been applied to Anchor’s assets. • Annual review of the accounting policies to ensure they remain appropriate and fit for purpose. • Annual review of the Accounting Manual which sets out accounting policies, principles and practices applied to Anchor’s accounts
Impairment
Accounting Policies
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