BT 2016 Annual Report Download - page 158

164 BT Group plc
Annual Report 2016
United States opinion
Report of Independent Registered Public Accounting
Firm to the Board of Directors and Shareholders of BT
Group plc (the ‘company’)
In our opinion, the accompanying group balance sheets and
the related group income statements, group statements of
comprehensive income, group statements of changes in equity
and group cash flow statements present fairly, in all material
respects, the financial position of BT Group plc and its subsidiaries
at 31 March 2016 and 31 March 2015 and the results of their
operations and their cash flows for each of the three years in the
period ended 31 March 2016 in conformity with International
Financial Reporting Standards as issued by the International
Accounting Standards Board. Also in our opinion, the company
maintained, in all material respects, effective internal control
over financial reporting as of 31 March 2016, based on criteria
established in the FRC Guidance on risk management, internal
control and related financial and business reporting.
The company's management is responsible for these financial
statements, for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal
control over financial reporting, included in management’s
evaluation of the effectiveness of internal control over financial
reporting as set out in the first two paragraphs of Internal
control over financial reporting in the Report of the Directors,
General information, of the BT Group plc Annual Report &
Form 20-F 2016.
Our responsibility is to express opinions on these financial
statements and on the company's internal control over financial
reporting based on our integrated audits. We conducted our
audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of
material misstatement and whether effective internal control over
financial reporting was maintained in all material respects.
Our audits of the financial statements included examining, on
a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles
used and significant estimates made by management, and
evaluating the overall financial statement presentation. Our audit
of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other
procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
A company’s internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of
the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorisations
of management and directors of the company; and (iii) provide
reasonable assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are
subject to the risk that controls may become inadequate because
of changes in conditions, or that the degree of compliance with
the policies or procedures may deteriorate.
As described in the second paragraph of Internal control over
financial reporting in the Report of the Directors, General
information, of the BT Group plc Annual Report & Form 20-F
2016, management has excluded EE Limited from its assessment
of internal control over financial reporting as of 31 March 2016,
based on the FRC Guidance on internal control (‘Turnbull’), which
is now reflected in the FRC Guidance on risk management, internal
control and related financial and business reporting, because it
was acquired by the company in a purchase business combination
during 2016. We have also excluded EE Limited from our audit
of internal control over financial reporting. EE Limited is a wholly-
owned subsidiary whose total assets and total revenues represent
37% and 5% respectively, of the related consolidated financial
statements amounts as of and for the year ended 31March 2016.
PricewaterhouseCoopers LLP
London, United Kingdom
4 May 2016