Annual report and accounts 2023 - Flipbook - Page 134
A.G. BARR p.l.c. Annual Report and Accounts 2023
Independent Auditor’s Report to the members of A.G. BARR p.l.c. continued
6.
Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person
would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Parent company financial statements
Materiality
£2.175m (2022: £2.07m)
£1.96m (2022: £1.89m)
Basis for determining materiality
5% (2022: 5%) of adjusted profit before tax.
Parent company materiality equates to 0.6% (2022: 0.7%) of
revenue, capped at 90% (2022: 90%) of Group materiality.
Rationale for the benchmark applied
We have used adjusted profit before tax as the benchmark
for our determination of materiality as we consider this to be
a critical performance measure for the Group on the basis
that it is a key metric to analysts and investors and has equal
prominence in the Annual Report. The adjusted items in the
year are summarised on page 201.
We have used revenue as the benchmark for our
determination of materiality as we consider this to be the
key driver of the business. As statutory materiality would
be higher than component materiality, we have capped
materiality to be 90% of group materiality being £1.96m
(2022: £1.89m). 90% is deemed to be appropriate based
on the company only contribution to the Group.
Group materiality
£2.18m
Component
materiality range
£0.76m to £1.96m
Adjusted profit
before tax £43.50m
Adjusted profit before tax
132
Group materiality
Audit and Risk
Committee
reporting threshold
£0.11m
