Aviva 2013 Annual Report Download - page 110

Aviva plc
Annual report and accounts 2013
108
Independent auditors’ report to the members of Aviva plc continued
Area of focus How the scope of our audit addressed the area of focus
Risk of fraud in revenue recognition
ISAs (UK & Ireland) presume there is a risk of fraud in revenue
recognition because of the pressure management may feel to achieve
the planned results. We focused on the timing and accuracy of the
recognition of gross earned premium, fees receivable under investment
contracts, reinsurance and acquisition costs associated with written
premium, and their presentation in the Consolidated income statement.
(Refer also to note 6 to the Consolidated financial statements.)
As the foundation of the evidence we obtained regarding the revenue
recognised during the year, we evaluated the relevant IT systems and
tested the internal controls over the completeness, accuracy and timing
of revenue recognised in the financial statements. We also tested journal
entries posted to revenue accounts to identify unusual or irregular items.
Risk of management override of internal controls
ISAs (UK & Ireland) require that we consider this.
We assessed the overall control environment of the Group, including the
arrangements for staff to “whistle-blow” inappropriate actions, and
interviewed senior management and the Group’s internal audit function.
We examined the significant accounting estimates and judgements
relevant to the financial statements for evidence of bias by the directors
that may represent a risk of material misstatement due to fraud. We also
tested journal entries made to identify unusual or irregular items.
Going Concern
Under the Listing Rules we are required to review the directors’ statement, set out on pages 83 and 84, in relation to going
concern. We have nothing to report having performed our review.
As noted in the directors’ statement, the directors have concluded that it is appropriate to prepare the Consolidated and the
Company’s financial statements using the going concern basis of accounting. The going concern basis presumes that the Group
and Parent Company have adequate resources to remain in operation, and that the directors intend them to do so, for at least one
year from the date the financial statements were signed. As part of our audit we have concluded that the directors’ use of the
going concern basis is appropriate.
However, because not all future events or conditions can be predicted, these statements are not a guarantee as to the Group’s
and the Parent Company’s ability to continue as a going concern.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion:
 the information given in the Strategic Report and the Directors’ report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
 the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies
Act 2006.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion:
 we have not received all the information and explanations we require for our audit; or
 adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
 the Company financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration
specified by law have not been made. We have no exceptions to report arising from this responsibility.
Corporate Governance Statement
Under the Listing Rules we are required to review the part of the Corporate Governance Statement relating to the Parent
Company’s compliance with nine provisions of the UK Corporate Governance Code (‘the Code’). We have nothing to report having
performed our review.
On page 84 of the Annual Report, as required by the Code Provision C.1.1, the directors state that they consider the Annual
Report taken as a whole to be fair, balanced and understandable and provides the information necessary for members to assess
the Group’s performance, business model and strategy. On pages 75 and 76 as required by C.3.8 of the Code, the Audit
Committee has set out the significant issues that it considered in relation to the financial statements, and how they were
addressed. Under ISAs (UK & Ireland) we are required to report to you if, in our opinion:
 the statement given by the directors is materially inconsistent with our knowledge of the Group acquired in the course of
performing our audit; or
 the section of the Annual Report describing the work of the Audit Committee does not appropriately address matters
communicated by us to the Audit Committee.
We have no exceptions to report arising from this responsibility.