The Edinburgh Investment Trust Plc Annual Financial Report 2022 - Flipbook - Page 50
48 / FINANCIAL REVIEW / THE EDINBURGH INVESTMENT TRUST PLC
Independent Auditor’s Report / continued
In planning our audit, we made enquiries of the Directors to understand the extent of the potential impact of climate change on the
Company’s financial statements.
The Directors concluded that the impact on the measurement and disclosures within the financial statements is not material because
the Company’s investment portfolio largely comprises level 1 quoted securities which are valued at fair value based on market prices. We
found this to be consistent with our understanding of the Company’s investment activities.
We also considered the consistency of the climate change disclosures included in the Strategic Report and Portfolio Manager’s Report
with the financial statements and our knowledge from our audit.
Key audit matters
–
Valuation and existence of investments
–
Income from investments
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.
Consideration of the impacts of COVID-19, which was a key audit matter last year, is no longer included because of reduced uncertainty
of the impact of COVID-19 in the current year as markets and economies continue to recover. Otherwise, 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
We tested the valuation of the equity investments by agreeing the
prices used in the valuation to independent third-party sources.
No material misstatements were identified from this testing.
Refer to the Audit Committee Report, the Accounting Policies and
Notes to the Financial Statements.
The investment portfolio at the year end principally comprised
quoted equity investments valued at £1,219 million.
We focused on the valuation and existence of investments
because investments represent the principal element of the net
asset value as disclosed on the Balance Sheet in the Financial
Statements.
We tested the existence of the investment portfolio by agreeing
investment holdings to an independent custodian confirmation.
No material misstatements were identified from this testing.