267694 EdinburghIT AR 2024 WEB - Flipbook - Page 54
52 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
INDEPENDENT AUDITOR’S REPORT / CONTINUED
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether
or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments
we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
The key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Valuation and existence of investments
Refer to the Audit Committee Report, Accounting
policies and Notes to the Financial Statements. (Note 9)
We tested the valuation of all of the investments by agreeing the
valuation to independent third party sources; and
The investment portfolio at the year end comprised
quoted equity investments valued at £1,207 million.
We tested the existence of all of the quoted equity investment
portfolio by agreeing investment holdings to an independent
custodian confirmation.
We focused on the valuation and existence of listed
investments because investments represent the
principal element of the net asset value as disclosed on
the Balance Sheet.
No material misstatements were identified from this testing.
Accuracy, completeness and occurrence of income
Refer to the Report of the Audit Committee , Accounting
policies and Notes to the Financial Statements (Note 2).
We found that the accounting policies implemented were in
accordance with accounting standards and the AIC SORP,
and that income from investments has been accounted for in
accordance with the stated accounting policy.
We tested accuracy of dividend receipts by agreeing the dividend
rates from investments to independent market data.
We focused on the accuracy, completeness and
occurrence of investment income as incomplete or
inaccurate income could have a material impact on the
Company’s net asset value.
We also focused on the accounting policy for
investment income recognition and the presentation
of investment income in the Income Statement for
compliance with the requirements of The Association
of Investment Companies Statement of Recommended
Practice (the “AIC SORP”), as incorrect application
could indicate a misstatement in income recognition.
To test for completeness, we tested, for all investment holdings
in the portfolio, that all dividends declared in the market for
investment holdings had been recorded.
We tested occurrence by tracing a sample of dividends received
to bank statements.
For special dividends, we assessed the appropriateness of the
classification of special dividends as revenue or capital by the
Directors with reference to publicly available information.
We also tested the allocation and presentation of dividend
income between the revenue and capital return columns of the
Income Statement in line with the requirements set out in the
AIC SORP by determining reasons behind dividend distributions.
No material misstatements were identified from this testing.
