Experian 2014 Annual Report Download - page 107

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Area of focus How the scope of our audit addressed the area of focus
Fraud in revenue recognition
ISAs (UK & Ireland) presume there is a risk of fraud in revenue
recognition because of pressure management may feel to
achieve the planned results.
Experian has multiple revenue streams with differing financial
characteristics that result in different recognition criteria and
audit procedures.
We focused on the timing of the recognition of revenue
especially around multi-element contracts, deferred revenue
and other non-standard contract terms.
(Refer also to note 5(p) to the financial statements.)
We evaluated the relevant systems and tested the internal controls over the
accuracy, existence and timing of revenue recognised in the financial statements.
We also tested journal entries posted to revenue accounts to identify unusual
or irregular items and determine their compliance with Group revenue
recognition policies.
We read significant customer agreements and tested the accounting for
contractual milestones against the analysis of contract positions that
management maintains.
Risk of management override of internal controls
ISAs (UK & Ireland) require that we consider this.
We assessed the overall control environment of the Group, including the
arrangements for staff to ‘whistle-blow’ inappropriate actions, and interviewed
senior management and the Group’s internal audit function.
We examined the significant accounting estimates and judgements relevant to
the financial statements for evidence of bias by the directors that may represent
a risk of material misstatement due to fraud.
We also tested journal entries, including consolidation entries, and
incorporated elements of unpredictability in the nature, timing and
extent of our audit procedures.
Going concern
The directors have voluntarily complied with Listing Rule 9.8.6(R)(3) of the UK Financial Conduct Authority and provided a statement
in relation to going concern, set out in the directors’ report, required for UK registered companies with a premium listing on the
London Stock Exchange.
The directors have requested that we review the statement on going concern as if the Company were a UK registered company.
We have nothing to report having performed our review.
As noted in the directors’ statement, the directors have concluded that it is appropriate to prepare the Group’s financial statements
using the going concern basis of accounting. The going concern basis presumes that the Group has adequate resources to remain
in operation, and that the directors intend it to do so, for at least one year from the date the financial statements were signed. As part
of our audit we have concluded that the directors’ use of the going concern basis is appropriate.
However, because not all future events or conditions can be predicted, these statements are not a guarantee as to the Group’s ability
to continue as a going concern.
Other matters on which we are required to report by exception
Adequacy of information and explanations received
Under the Companies (Jersey) Law 1991 we are required to report to you if, in our opinion, we have not received all the information
and explanations we require for our audit. We have no exceptions to report arising from this responsibility.
Corporate governance report
Under the Listing Rules of the UK Financial Conduct Authority we are required to review the part of the corporate governance report
relating to the Company’s compliance with nine provisions of the UK Corporate Governance Code (‘the Code’). We have nothing to
report having performed our review.
Financial statements • Independent auditors’ report: Group financial statements