Scotcash Annual Report 2021-22 - Report - Page 18
2020-21 ANNUAL REPORT & FINANCIAL STATEMENTS
2020-21 ANNUAL REPORT & FINANCIAL STATEMENTS
Auditor’s
report
Continued
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on page 2, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate
the company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line
with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The
specific procedures for this engagement and the extent to
which these are capable of detecting irregularities, including
fraud is detailed below:
Based on our understanding of the company and the industry
we identified that the principal risks of non-compliance with
laws and regulations related to, but were not limited to;
In identifying and assessing the risks of material misstatements
in respect of irregularities, including fraud and non-compliance
with laws and regulations we considered the following:
⊲ UK tax and employment legislation.
⊲ Our enquiries of management about their identification
and assessment of the risks of irregularities.
Page 18
Our procedures to respond to the risks identified included
the following:
⊲ Gaining an understanding of the legal and regulatory
framework applicable to the company and the industry in
which it operates;
⊲ Reviewing financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
⊲ Reviewing correspondence with HMRC;
We identify and assess the risks of material misstatement
of the financial statements, whether due to fraud or error,
and then design and perform audit procedures in response
to those risks, including obtaining audit evidence that is
sufficient and appropriate to provide a basis for our opinion.
⊲ Regulations and legislation pertinent to the company’s
industry operations; and
the financial statements (including the risk of management
override of controls), and determined that the principal risks
were related to;
⊲ Posting inappropriate journal entries; and
⊲ Management bias in accounting estimates.
Audit response to the risks identified
⊲ Enquiring of management and legal advisors concerning
actual and potential litigation and claims;
Explanation as to what extent the audit was considered capable
of detecting irregularities including fraud
⊲ The nature of the company and the industry, control
environment and business performance including key
drivers for performance targets; and
We considered the extent to which non-compliance might
have a material impact on the financial statements. We also
considered those laws and regulations which have a direct
impact on the preparation of the financial statements, such
as the Companies Act 2006. We evaluated management’s
incentives and opportunities for fraudulent manipulation of
⊲ In addressing the risk of fraud as a result of management
override of controls, testing the appropriateness of journal
entries and other adjustments, assessing whether the
judgements made in making accounting estimates are
indicative of a potential bias; and, evaluating business
rationale of any significant transactions that are unusual or
outside the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members,
and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures
described above and the further removed non-compliance
with laws and regulations is from events and transactions
reflected in the financial statements, the less likely we would
be to become aware of it. Also, the risk of not detecting a
material misstatement due to fraud is higher than the risk of
not detecting one resulting from error, as fraud may involve
deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities is available on the
Financial Reporting Council’s website at:
https://www.frc.org.uk/auditors/audit-assurance
This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report
and for no other purpose. To the fullest extent permitted by
law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a
body, for our audit work, for this report, or for the opinions we
have formed.
Jenny Simpson
Senior Statutory Auditor
For and on behalf of Wylie & Bisset (Audit) Limited,
Statutory Auditor
168 Bath Street, Glasgow, G2 4TP
Date: 26 August 2021
Page 19