Independent auditor's report to the members of Jockey Club Racecourses Limited (continued)
o management override of controls: we evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial results and management bias in accounting estimates and judgements. Audit procedures performed included: • challenging assumptions made by management in their significant accounting estimates in particular in relation to depreciation rates on tangible fixed assets, impairment of tangible fixed assets, provisions, actuarial assumptions and recognition of deferred tax asset. • identifying and testing journal entries, in particular any journal entries to revenue not in line with expectations and reviewing journal entries for journals inconsistent with the usual transactions of the Company. o revenue recognition: application ofcut offand existence. We reviewed transactions pre and post year end to check that the associated revenue is reflected in the correct period. We reviewed manual postings to revenue to ensure that no manipulation had occurred in the general ledger. • communicating relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Our audit procedures were designed to respond to risks ofmaterial misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware ofit.
A further description of our responsibilities is available on the Financial Reporting Council's website at: httos://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.
DocuSigned by:
E25A0E124BD44AA Ian Clayden (Senior Statutory Auditor) For and on behalf of BDO LLP, statutory auditor London
5 May 2022
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
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