6 Independent Auditor's Report
Committee. As set out on pages 39 to 42, the Board consider that it is impracticable to have a separate Audit and Risk Committee for the Association. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where we are required by the Co-operative and Community Benefit Societies Act 2014 to report to you if, in our opinion: • the Association has not kept proper books of account; • the Association has not maintained a satisfactory system of control over its transactions; • the financial statements are not in agreement with the Association’s books of account; or • we have not received all the information and explanations we need for our audit. Responsibilities of the board As explained more fully in the Board members responsibilities statement, the Board is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Board members determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board are responsible for assessing the Group and the Association’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board either intend to liquidate the Group or the Association or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements 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. Extent to which the audit was capable of detecting irregularities, including fraud 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: Non-compliance with laws and regulations Based on: • Our understanding of the Group and the industry in which it operates; • Discussion with management, those charged with governance, the Audit and Risk Committee and legal counsel; and
Component materiality We set materiality for each component of the Group based on a percentage of between 4% and 90% of Group materiality dependent on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from £1.2m to £25.7m. In the audit of each component, we further applied performance materiality levels of 75% of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated. Reporting threshold We agreed with the Audit and Risk Committee that we would report to them all individual audit differences in excess of £0.4m (2023: £0.3m). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds. Other information The Board are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Corporate Governance statement As the Association has voluntarily adopted the UK Corporate Governance Code 2018, we are required to review the Board’s statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Association’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Going concern and longer term viability • The Board’s statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified as set out on pages 21 and 56. • The Board’s explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate as set out on page 21. Other Code provisions • Board’s statement on fair, balanced and understandable as set out on page 55; • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks as set out on pages 44 to 48; and • The section of the annual report that describes the review of effectiveness of risk management and internal control systems as set out on page 44. • The section describing the work of the Audit and Risk
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