RWS Annual Report 2022 web - Flipbook - Page 98
Independent Auditor's Report to the Members of
RWS Holdings plc (continued)
AN OVERVIEW OF THE SCOPE OF THE PARENT COMPANY AND GROUP
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality
and our allocation of performance materiality determine
our audit scope for each company within the Group.
Taken together, this enables us to form an opinion on the
consolidated financial statements. We take into account
size, risk profile, the organisation of the Group and
effectiveness of Group-wide controls and changes in the
business environment when assessing the level of work to
be performed at each company.
In assessing the risk of material misstatement to the
Group financial statements, and to ensure we had
adequate quantitative coverage of significant accounts in
the financial statements, of the reporting components of
the Group, we selected 14 components covering entities
within the UK, US, Czech Republic and EMEA which
represent the principal business units within the Group.
Of the 14 components selected, we performed an audit
of the complete financial information of 8 components
(“full scope components”) which were selected based
on their size or risk characteristics. For the remaining 6
components (“specific scope components”), we performed
audit procedures on specific accounts within that
component that we considered had the potential for the
greatest impact on the significant accounts in the financial
statements either because of the size of these accounts or
their risk profile.
The reporting components where we performed audit
procedures accounted for 72% (2021: 66%) of the
Group’s profit before tax adjusted for exceptional items,
acquisition costs and amortisation of acquired intangibles,
87% (2021: 84%) of the Group’s Revenue and 96% (2021:
87%) of the Group’s Total assets. For the current year,
the full scope components contributed 65% (2021: 53%)
of the Group’s profit before tax adjusted for exceptional
items, acquisition costs and amortisation of acquired
intangibles, 76% (2021: 74%) of the Group’s Revenue
and 94% (2021: 82%) of the Group’s Total assets. The
specific scope components contributed 7% (2021: 13%)
of the Group’s Profit before tax adjusted for exceptional
items, acquisition costs and amortisation of acquired
intangibles, 11% (2021: 10%) of the Group’s Revenue and
2% (2021: 5%) of the Group’s Total assets. The audit scope
of these components may not have included testing of
all significant accounts of the component but will have
contributed to the coverage of significant accounts tested
for the Group. We also instructed 1 location to perform
specified procedures over certain aspects of capitalised
development costs, as described in the Risk section above.
Of the remaining components that together represent
28% of the Group’s Profit before tax adjusted for
exceptional items, acquisition costs and amortisation
of acquired intangibles, none are individually greater
than 5% of the Group’s Profit before tax adjusted for
98
RWS — Annual Report 2022
INDEPENDENT AUDITOR’S REPORT
exceptional items, acquisition costs and amortisation
of acquired intangibles. For these components, we
performed other procedures, including analytical review
and/or ‘review scope’ procedures, testing of consolidation
journals and intercompany eliminations and foreign
currency translation recalculations to respond to any
potential risks of material misstatement to the Group
financial statements to respond to any potential risks of
material misstatement to the Group financial statements.
The Group audit team has also performed centralised
testing over cash and cash equivalent balances for
existence purposes in these review scope components.
The charts below illustrate the coverage obtained from
the work performed by our audit teams.
Profit before tax adjusted for exceptional
items, acquisition costs and
amortisation of acquired
intangibles
26 %
65%
Full scope components
9%
Specific scope
components
26%
Other procedures
9%
65%
Revenue
74%
Full scope components
12%
Specific scope
components
14%
Other procedures
14 %
12%
74 %
Total assets
80%
Full scope components
5%
Specific scope
components
15%
15%
5%
Other procedures
80 %
