Barclays 2014 Annual Report Download - page 253

barclays.com/annualreport Barclays PLC Annual Report 2014 I 251
Area of focus How our audit addressed the area of focus and what we found
IT systems and controls We focused on this area because the Group’s
financial accounting and reporting systems are
heavily dependent on complex systems and there
is a risk that automated accounting procedures
and related IT dependent manual controls are not
designed and operating effectively.
We assessed and tested the design and operating
effectiveness of the controls over the continued integrity of
the IT systems that are relevant to financial reporting. We
examined the framework of governance over the Group’s IT
organisation and the controls over program development and
changes, access to programs and data and IT operations,
including compensating controls where required. Where
necessary we also carried out direct tests of certain aspects of
the security of the Group’s IT systems including access
management and segregation of duties.
The combination of the tests of the controls and the direct
tests that we carried out gave us sufficient evidence to enable
us to rely on the continued and proper operation of the
Group’s IT systems for the purposes of our audit.
Re-segmentation During the year the Group redefined the segments
of the business for the purposes of financial
reporting. As a consequence we paid particular
attention to the following matters as part of our
audit:
Q That prior period financial information has been
accurately restated in a manner consistent with
the current year;
Q The consistent application of the adjustments,
allocations and other judgements necessary to
divide the investment banking activities between
the Investment Bank and Barclays Non-Core
segments; and
Q Whether there were any implication for
impairment or the estimation of the fair value of
assets or businesses because previous
expectations for them may no longer hold true
following the re-segmentation.
Our audit work focused on the following areas:
Q We tested the restatement of the prior period financial
information; we did not find any material discrepancies with
the principles used in the current year;
Q We tested the division of the investment banking activities
for the full year; we did not find any material discrepancies
with the principles adopted to define the new segments at
the time of the restatement;
Q We examined the valuation and impairment judgements of
assets and businesses for which previous expectations may
no longer hold true following the re-segmentation; we
found no material exceptions; and
Q In particular we examined the accounting treatment of the
Group’s contracted sale of Barclays Bank SAU in Spain
which was included in Barclays Non-Core; we concur with
the treatment adopted.
How we developed the audit scope
We calibrated the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial statements
as a whole, taking into account the geographic and segmental
structure of the Group, the accounting processes and controls, and the
industry in which the Group operates.
During the year the Group re-segmented its business into five core
operating segments: Personal and Corporate Banking, Investment
Bank, Africa Banking, Barclaycard and Head Office together with
Barclays Non-Core. For the purposes of planning our audit, we
identified all six segments as components in the Group audit (‘the
components’).
In establishing our overall approach to audit the Group, we considered
the significance of these components to the financial statements, our
assessment of risk within each component, the overall coverage across
the Group achieved by our procedures, as well as the risk associated
with less significant components not brought into the normal scope of
our audit.
We determined the type of work for each component that needed to be
performed by us in relation to activity within the UK, or by other PwC
network firms operating under our instruction in relation to activity
outside the UK. Where the work was performed by those other firms,
we determined the level of involvement we needed to have in their
audit work to be able to conclude whether sufficient appropriate audit
evidence had been obtained as a basis for our opinion on the Group
financial statements as a whole. We also visited other PwC network
firms to corroborate that our audit plan was appropriately actioned.
Of the six components, we performed an audit of the complete
financial information of each of Personal and Corporate Banking,
Investment Bank, Africa Banking and Barclaycard due to their size and
their risk characteristics and each of the adjusting items. We also
carried out specific audit procedures on certain financial statement line
items in each of the remaining two components: Barclays Non-Core
and Head Office.
In aggregate, our audit procedures accounted for:
Components Proportion of Total Income Proportion of Total Assets
Audit of the complete financial information of full scope components and adjusting items 80% 55%
Specific audit procedures for certain financial line items of the other two components 2% 31%
Out of scope 18% 14%
Total 100% 100%
This, together with additional procedures performed at the Group level, gave us the evidence we needed for our opinion on the Group financial
statements as a whole.
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