35 Finsbury Food Group Annual Report & Accounts 2017
Independent Auditor’s Report to the Members of Finsbury Food Group Plc
3. Our Application of Materiality and an Overview of the Scope of our Audit
Materiality for the Group Financial Statements as a whole was set at £875,000 (2016: £950,000), determined with reference to a benchmark of Group profit before interest and tax of £17.6m, of which it represents 5% (2016: Group profit before tax normalised to exclude certain one-off costs including the write-off of goodwill of £4.3m and payments for settlement of share options of £2.8m, of which it represents 4.8%).
Materiality for the Parent Company Financial Statements as a whole was set at £656,000 (2016: £712,000), determined with reference to a benchmark of company total assets, of which it represents 0.5% (2016: 0.6%).
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £43,750 (2016: £47,000), in addition to other identified misstatements that warranted reporting on qualitative grounds.
Of the Group’s 8 (2016: 8) reporting components, which include the Parent Company, we subjected 7 (2016: 7) to audits for Group reporting purposes.
We conducted specified procedures over financial information (including enquiry) at a further one non financially significant component. The component for which we performed work other than audits for Group reporting purposes was not individually significant but was included in the scope of our Group reporting work in order to provide further coverage over the Group’s results.
The components within the scope of our work accounted for the following percentages of the Group’s results.
The Group team instructed component auditors as to the significant areas to be covered, including the relevant risks detailed on the previous page and the information to be reported back. The Group team approved the component materialities, which ranged from £20,000 to £450,000 (2016: £20,000 to £712,000), having regard to the mix of size and risk profile of the Group across the components. The work on 4 of the 8 components (2016: 4 of the 8 components) was performed by component auditors and the rest by the Group audit team.
The Group audit team visited 7 (2016: 7) component locations in the UK. At these visits, the findings reported to the Group team were discussed in more detail, and any further work required by the Group team was then performed by the component auditor.
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