UNBOUNCE - EXAMPLE PAGE-REPORT-ENTERPRISE DOCUMENT-KINGSPAN - Flipbook - Page 122
INDEPENDENT AUDITOR’S REPORT
to the Members of Kingspan Group plc (continued)
Audit work at component locations for the
purpose of obtaining audit coverage over
significant financial 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 €3.0 million
to €5.625 million (2020: €2.1 million to
€3.675 million).
Reporting threshold
Reporting threshold is an amount below
which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that
we would report to them all uncorrected
audit differences in excess of €1.725
million, which is set at approximately
5% of planning materiality, as well as
differences below that threshold that,
in our view, warranted reporting on
qualitative grounds.
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.
An overview of the scope
of our audit report
Tailoring the scope
Our assessment of audit risk, our
evaluation of materiality and our
allocation of performance materiality
determine our audit scope for each entity
within the Group. Taken together, this
enables us to form an opinion on the
Group financial statements.
In determining those components in
the Group at which we perform audit
procedures, we utilised size and risk criteria
in accordance with ISAs (Ireland).
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, we selected 55 components
covering entities across Europe, the
Americas, the Middle East and Australia,
which represent the principal business
units within the Group.
Of the 55 components selected, we
performed an audit of the complete
financial information of 29 components
(‘full scope components’) which were
selected based on their size or risk
characteristics. For the remaining
26 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.
In addition to the 55 components
discussed above, we selected a further
22 components where we performed
procedures at the component level that
were specified by the Group audit team
in response to specific risk factors. Also,
we performed review procedures at an
additional 10 components.
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The reporting components where we
performed either full or specific scope
audit procedures accounted for 83% of the
Group’s Profit before tax from continuing
operations, 73% of the Group’s Revenue
and 85% of the Group’s Total Assets.
The full scope components contributed
68% of the Group’s Profit before tax from
continuing operations, 53% of the Group’s
Revenue and 66% of the Group’s Total
Assets. The specific scope components
contributed 15% of the Group’s Profit
before tax from continuing operations,
20% of the Group’s Revenue and 19% of
the Group’s Total Assets. The components
where we either performed procedures
that were specified by the Group audit
team in response to specific risk factors or
review scope procedures contributed 4%
and 4% respectively of the Group’s Profit
before tax from continuing operations,
1% and 6% respectively of the Group’s
Revenue and 1% and 3% respectively 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.
Of the remaining components, which
together represent 9% of the Group’s
Profit before tax from continuing
operations, none is individually greater
than 1.5% of the Group’s Profit before
tax from continuing operations. For
these components, we performed
other procedures, including analytical
review, confirmation of cash balances,
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.
