Annual Financial Statements for the year ended 30 June 2021 0 - Book - Page 16
1
2
3
4
SASOL LIMITED GROUP
Independent auditor’s report continued
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate
financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits,
we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the
financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material
if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the
consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality
for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements,
both individually and in aggregate on the financial statements as a whole.
Overall group materiality
R1 357 million
How we determined it
4 % of consolidated earnings before tax, adjusted for the following remeasurement items:
• Impairments and impairment reversals of property, plant and equipment and other assets; and
• Profit on disposal of assets and businesses.
Rationale for the materiality benchmark applied
We chose consolidated earnings before tax as the benchmark because, in our view, it is the benchmark against which the
performance of the Group is most commonly measured by users, and is a generally accepted benchmark. Consolidated
earnings before tax is adjusted for impairments, reversals of impairments as well as profit on disposal of assets and
businesses. These adjustments are not considered to be part of the Group’s sustainable operating performance. We chose
4% which is less than the quantitative materiality thresholds used for profit-orientated companies in this sector, due to
the impact of the volatile macro-economic environment on the Group’s results.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial
statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the
Group operates.
In scope business units were identified based on scoping benchmarks such as the business unit’s contribution to key financial statement
line items (consolidated earnings before tax, consolidated turnover and consolidated total assets), risk associated with the business unit
and known accounting matters related to the business unit. We conducted full scope audit procedures at 12 business units and limited scope
audit procedures at a further 14 business units.
In establishing the overall approach to the group audit, we determined the type of work that needed to be performed by us, as the group
engagement team, or component auditors from other PwC network firms or other networks operating under our instruction. Where the work
was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those components
to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the consolidated
financial statements as a whole.
The audits undertaken for group reporting purposes are in respect of the key reporting business units of the Group.
14
Sasol Annual Financial Statements 2021