Scotcash Annual Report 2021-22 - Report - Page 25
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 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;
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;
⊲ Enquiring of management and legal advisors
concerning actual and potential litigation and claims;
⊲ Reviewing correspondence with HMRC;
⊲ 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 non-compliance with laws and regulations
throughout the audit.
There are inherent limitations in the audit procedures
described above and the further removed noncompliance
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/Our-Work/Audit/Audit-and-assurance/
Standards-and-guidance/Standards-andguidance-forauditors/Auditors-responsibilities-for-audit/Descriptionof-auditors-responsibilities-foraudit.aspx. 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.
2021-22 ANNUAL REPORT & FINANCIAL STATEMENTS
Claire Dalrymple FCCA
Senior Statutory Auditor
For and on behalf of Wylie & Bisset (Audit) Limited,
Statutory Auditor
168 Bath Street, Glasgow, G2 4TP
Date: 8 September 2022
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