41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 176
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THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
INDEPENDENT AUDITOR’S REPORT continued
To the members of Unite Group PLC
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected
and undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements
Parent Company financial statements
Performance
materiality
70% (2021: 70%) of Group materiality
70% (2021: 70%) of Parent Company materiality
Basis and rationale
for determining
performance
materiality
In determining performance materiality, we considered the following factors:
a. our risk assessment, including our assessment of the Group’s overall control environment, and
that we consider it appropriate to rely on controls over a number of business processes; and
b. our past experience of the audit, which has indicated a low number of corrected and uncorrected
misstatements identified in prior periods.
6.3. Error reporting threshold
We agreed with the Audit & Risk Committee that we would report to the Committee all audit differences in excess of
£1.9m (2021: £1.8m), as well as differences below that threshold that, in our view, warranted reporting on qualitative
grounds. We also report to the Audit & Risk Committee on disclosure matters that we identified when assessing the
overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide
controls, and assessing the risks of material misstatement at the Group level.
The Group is audited by one audit team, led by the Senior Statutory Auditor. We engage with staff at the Group’s Bristol
head office, as the books and records for each entity within the Group are maintained at this location. The Group only
operates within the United Kingdom – this includes Unite Group plc and its related subsidiaries, as well as the two joint
ventures, USAF and LSAV.
We audit all of the results of the Group together with USAF and LSAV, for the purposes of our Group audit. We have also
tested the consolidation process to confirm our conclusion that there were no significant risks of material misstatement
of the aggregated financial information.
7.2. Our consideration of the control environment
From our understanding of the Group and after assessing relevant controls, we tested and relied on controls in
performing our audit of rental income recorded within the Group’s room booking system.
We also tested relevant controls relating to the valuation of investment and development property, given the significance
of this balance to the Group.
In addition, we have obtained an understanding of the relevant controls such as those relating to the financial reporting
cycle, and those in relation to our other key audit matters.
The Group uses the following application systems for the recording and reporting of its financial statements:
•
Oracle EBS – general ledger and room booking system;
•
Portal Agent Desktop (PAD) – room booking portal used by students and implemented on top of Oracle EBS and
therefore where revenue transactions are initiated; and
•
HFM – used to prepare the Group consolidation at the Group’s Head Office.
We involved IT specialists to assess the relevant controls over the three systems set out above. Working with IT specialists
we identified and assessed relevant risks arising from each relevant IT system and the supporting infrastructure
technologies based on the role of application in the Group’s flow of transactions. We obtained an understanding of the
IT environment as part of these risk assessment procedures. We further performed the following procedures:
•
Determined whether each general IT control, individually or in combination with other controls, was appropriately
designed to address the risk;
•
Obtained sufficient evidence to assess the operating effectiveness of the controls across the full audit period; and
•
Performed additional procedures where required if there were exceptions to the operation of those controls, including
relevant mitigating controls.
