Vodafone 2015 Annual Report Download - page 100

Our audit approach
Overview
Audit scope
Materiality
Areas of
focus
Overall Group materiality: £220 million which represents 5% of a three year average
of adjusted operating prot (‘AOP’). We used a three year average given the impact of
Project Spring investment (refer to pages 6 to 7 in the Annual Report) in the current year
toensure that the measure is more durable over a period of time.
We identied eight local operations which, in our view, required an audit of their complete
nancial information, either due to their size or their risk characteristics including UK,
Spain, Italy, India, Germany and Vodacom Group Limited. The scope of work in Spain
and Germany included an audit of the complete nancial information of Ono and Kabel
Deutschland, which were acquired in the current and prior year respectively.
Further specic audit procedures over central functions and areas of signicant
judgement, including taxation, goodwill, treasury and material provisions and contingent
liabilities, were performed at the Group’s Head Ofce.
a Taxation matters including a provisioning claim for withholding tax in India and the
recognition and recoverability of deferred tax assets in Luxembourg and Germany.
a Carrying value of goodwill.
a Provisions and contingent liabilities.
a Revenue recognition – accuracy of revenue recorded given the complexity of systems.
a Signicant one-off transactions.
a Capitalisation and asset lives.
a IT systems and controls.
The scope of our audit and our areas of focus
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (‘ISAs (UK and Ireland)’).
We designed our audit by determining materiality and assessing the risks of material misstatement in the nancial statements. In particular,
we looked at where the Directors made subjective judgements, for example in respect of signicant accounting estimates that involved making
assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override
of internal controls, including evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due
to fraud.
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our resources and effort, are identied
as “areas of focus” in the table below. We have also set out how we tailored our audit to address these specic areas in order to provide an opinion
on the nancial statements as a whole, and any comments we make on the results of our procedures should be read in this context. This is not
a complete list of all risks identied by our audit.
Vodafone Group Plc
Annual Report 2015
98
Audit report on the consolidated and parent company nancial statements (continued)