RWS AR 23 Final Single pages - Flipbook - Page 109
OUR APPLICATION OF MATERIALITY
Performance materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the e昀昀ect of
identi昀椀ed misstatements on the audit and in forming
our audit opinion.
The application of materiality at the individual
account or balance level. It is set at an amount to
reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected
misstatements exceeds materiality.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to in昀氀uence the economic decisions of the
users of the 昀椀nancial statements. Materiality provides a
basis for determining the nature and extent of our audit
procedures.
We determined materiality for the Group to be £5.9
million (2022: £6.0 million), which is 5.0% (2022: 4.5%)
of Loss before tax adjusted for exceptional items,
impairment losses, acquisition costs and amortisation
of acquired intangibles. We believe that Loss before
tax adjusted for exceptional items, impairment
losses, acquisition costs and amortisation of acquired
intangibles provides us with an appropriate basis
for materiality as it represents the primary measure
used by shareholders in assessing the performance
of the Group, as it is a re昀氀ection of the underlying
performance of the Group.
We determined materiality for the Parent Company to
be £10.5 million (2022: £9.3 million), which is 1.0% (2022:
1.0%) of total assets.
Starting
basis
Adjustments
Materiality
• Totals £118.0m
Audit work at component locations for the purpose
of obtaining audit coverage over signi昀椀cant
昀椀nancial statement accounts is undertaken
based on a percentage of total performance
materiality. The performance materiality set for
each component is based on the relative scale and
risk of the component to the Group as a whole
and our assessment of the risk of misstatement at
that component. In the current year, the range of
performance materiality allocated to components
was £0.6m to £1.5m (2022: £0.6m to £1.3m).
Reporting threshold
An amount below which identi昀椀ed misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we
would report to them all uncorrected audit
di昀昀erences in excess of £0.3m (2022: £0.3m), which
is set at 5% of planning materiality, as well as
di昀昀erences below that threshold that, in our view,
warranted reporting on qualitative grounds.
• Loss before tax - £10.9m
• Exceptional items - £22.6m
• Impairment losses - £62.4m
• Acquisition costs - £5.1m
• Amortisation of acquired intangibles
On the basis of our risk assessments, together
with our assessment of the Group’s overall
control environment, our judgement was that
performance materiality was 50% (2022: 50%) of
our planning materiality, namely £3.0m (2022:
£3.0m). We have set performance materiality
at this percentage due to a combination of risk
factors.
- £38.8m
We evaluate any uncorrected misstatements
against both the quantitative measures of
materiality discussed above and in light of other
relevant qualitative considerations in forming our
opinion.
FINANCIAL STATEMENTS RWS Holdings plc — Annual Report 2023
109