HSBC 2006 Annual Report Download - page 293

HSBC HOLDINGS PLC
Independent Auditor’s Report to the Members of HSBC Holdings plc
291
We have audited the Group and parent company financial statements (the ‘financial statements’) of HSBC Holdings
plc for the year ended 31 December 2006 which comprise the Group Income Statement, the Group and parent
Company Balance Sheets, the Group and parent Cash Flow Statements, the Group Statement of Recognised Income
and Expense, the Company Statement of Changes in Equity and the related notes. These financial statements have
been prepared under the accounting policies set out therein. We have also audited the information in the Directors’
Remuneration Report that is described as having been audited.
This report is made solely to the company’s members, as a body, in accordance with section 235 of the
Companies Act 1985. 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.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report, the Directors Remuneration Report and the financial
statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by
the EU are set out in the Statement of Directors’ Responsibilities on page 290.
Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report to be
audited in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK
and Ireland).
We report to you our opinion as to whether the financial statements give a true and fair view and whether the
financial statements and the part of the Directors’ Remuneration Report to be audited have been properly prepared in
accordance with the Companies Act 1985 and, as regards the group financial statements, Article 4 of the IAS
Regulation. We also report to you whether in our opinion the information given in the Directors’ Report is consistent
with the financial statements.
In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have
not received all the information and explanations we require for our audit, or if information specified by law
regarding directors’ remuneration and other transactions is not disclosed.
We review whether the Corporate Governance Statement reflects the company’s compliance with the nine
provisions of the 2003 Combined Code specified for our review by the Listing Rules of the Financial Services
Authority, and we report if it does not. We are not required to consider whether the board’s statements on internal
control cover all risks and controls, or form an opinion on the effectiveness of the group’s corporate governance
procedures or its risk and control procedures.
We read the other information contained in the Annual Report and Accounts 2006 and consider whether it is
consistent with the audited financial statements. We consider the implications for our report if we become aware of
any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not
extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements and the part of the Directors’ Remuneration Report to be audited. It also
includes an assessment of the significant estimates and judgments made by the directors in the preparation of the
financial statements, and of whether the accounting policies are appropriate to the group’s and company’s
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered
necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements
and the part of the Directors’ Remuneration Report to be audited are free from material misstatement, whether caused
by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of the Directors’ Remuneration Report to be
audited.