Unilever 2014 Annual Report Download - page 44

3 OUR APPLIATION OF MATERIALITY AND AN OVERVIEW OF THE SOPE OF OUR AUDIT
Materalty
Based on our professonal udgment the materalty for the onsoldated Fnancal Statements as a whole was set at 350 mllon,
determned wth reference to a benchmark of roup proft before taxaton (of whch t represents 46%) We also take
msstatements nto account that are n our opnon materal for qualtatve reasons
We agreed wth the Audt ommttee to report to t any corrected and uncorrected dentfed msstatements exceedng 25 mllon
n addton to other dentfed msstatements that warranted reportng on qualtatve grounds
Scope of our audt
The roup operates through a sgnfcant number of legal enttes, each of whch s a reportng component We performed audts for
roup reportng purposes of 13 components, as well as audts of revenue and the related accounts recevable balances at a further
5 components The latter were not ndvdually fnancally sgnfcant enough to requre an audt for roup reportng purposes but
were ncluded n the scope of our roup reportng work n order to provde further coverage over the roup’s revenue
The roup has 5 centralsed operatng centres that perform accountng and reportng actvtes alongsde related controls
Together these operatng centres process a substantal porton of the roup’s transactons The outputs from the centralsed
operatng centres are ncluded n the fnancal nformaton of the component enttes they servce and therefore they are not
separate reportng components Each of the operatng centres s subect to specfed audt procedures Further audt procedures
are performed at each reportng component to cover matters not covered at the centralsed operatng centres Together ths
results n audts for roup reportng purposes on those reportng components
The percentages of the roup’s Revenue, Proft before Taxaton and Total Assets represented by the components wthn the scope
of our work and procedures performed at corporate level are as follows
The remanng 37% of roup Revenue and 30% of roup Proft before Taxaton s represented by a sgnfcant number of out-of-
scope reportng components, none of whch ndvdually represents more than 2% of roup Revenue and/or roup Proft before
Taxaton A substantal porton of these out-of-scope components utlse the fve operatng centres and are therefore subect to
audt procedures performed at these operatng centres In addton, for these out-of-scope components, we performed analyss
(focusng specfcally on revenue and operatng margns) at the aggregated roup level to re-examne our assessment that there
are no sgnfcant rsks of materal msstatement wthn these components
For the n-scope components the roup audt team nstructed component audtors as to the sgnfcant areas to be covered,
ncludng the sgnfcant rsks detaled above and the nformaton to be reported back The roup audt team approved component
materalty levels, whch ranged from 5 mllon to 275 mllon, havng regard to the mx of sze and rsk profle of the roup
across the components The work on all components was performed by component audtors
The roup audt team vsted component locatons n the USA, the UK, the Netherlands, Inda, Indonesa, Swtzerland, Brazl, South
Afrca, ermany, Turkey, Russa, Sngapore, hna, Mexco and Argentna Telephone and/or onlne meetngs were also held wth the
audtors of these components and the maorty of all other components The fndngs reported to the roup audt team were dscussed
n more detal wth component audtors, and any further work requred by the roup audt team was then performed by the
component audtor
GROUP REVENUE
Audits for Group
Reporting
Purposes 51%
Audits of Account
Balance12%
Audits of Account
Balance13%
Out of Scope
Components37%
Audits for Group
Reporting
Purposes 75%
Audits of Account
Balance3%
Out of Scope
Components22%
Audits for Group
Reporting
Purposes 57%
Out of Scope
Components30%
GROUP TOTAL ASSETSGROUP PROFIT BEFORE TAXATION
81Unilever Annual Report and Accounts 2014 Financial statements