Docusign Envelope ID: 7C07248F-983B-4F8B-904D-FCB9B680B5CE
THE UTC COMMON INVESTMENT FUND
INDEPENDENT AUDITORS’ REPORT TO THE TRUSTEE OF THE UTC COMMON INVESTMENT FUND
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. 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 based on these responsibilities.
Responsibilities for the financial statements and the audit
Responsibilities of the trustee for the financial statements As explained more fully in the statement of trustee’s responsibilities, the trustee is responsible for ensurin g that the financial statements are prepared in accordance with the applicable framework and for being satisfied that they give a true and fair view. The trustee is also responsible for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In the preparation of the financial statements, the trustee is responsible for assessing the CIF’s ability to continue as a g oing concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the trustee either intends to wind up the CIF, or has no realistic alternative but to do so. Auditors’ responsibilities for the audit of the financial st atements 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 auditors’ report that includes our opinion. Reasonable assuranc e 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.
Based on our understanding of the CIF and its environment, we identified that the principal risks of non-compliance with laws and regulations related to the administration of the CIF in accordance with the Pensions Acts 1995 and 2004 and regulations made under them, and codes of practice issued by the Pensions Regulator; and we considered the extent to which non- compliance might have a material effect on the financial statements. We also considered the direct impact of these laws and regulations on the financial statements. We evaluated incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of override of controls, by the trustee and those responsible for, or involved in, the preparation of the underlying accounting records and financial statements, and determined that the principal risks were related to posting inappropriate journals to conceal misappropriation of assets and inappropriate adjustments of asset valuations. Audit procedures performed by the engagement team included: Testing journal entries where we identified particular fraud risk criteria. Obtaining independent confirmations of material investment valuations and cash balances at the year end. Testing estimates and judgements made in the preparation of the financial statements for indicators of bias. Reviewing meeting minutes, any correspondence with the Pensions Regulator, and significant contracts and agreements. Holding discussions with the trustee to identify significant or unusual transactions and known or suspected instances of fraud or non-compliance with applicable laws and regulations. Assessing financial statement disclosures, and agreeing these to supporting evidence, for compliance with the Pensions Acts 1995 and 2004 and regulations made under them.
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