Unilever 2013 Annual Report Download - page 90

OVERVIEW OF OUR AUDIT APPROAH
MATERIALITY
We set certain thresholds for materiality. These helped us to
determine the nature, timing and extent of our audit procedures
and to evaluate the effect of misstatements, both individually and
on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the consolidated financial statements as a whole to be €330
million. This represents approximately 5% of profit before tax.
We agreed with the Audit Committee that we would report to them
misstatements identified during our audit above €25 million as
well as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
OVERVIEW OF THE SCOPE OF OUR AUDIT
The Group is primarily structured and monitored across four key
categories being Personal Care, Foods, Refreshment and Home
Care. The consolidated financial statements are a consolidation of
the Group’s reporting units which include operating businesses,
centralised functions and supply chain entities.
In establishing the overall approach to the Group audit, we
determined the type of work that needed to be performed at
reporting units. We also determined the level of involvement we
needed to have in the audit work at those reporting units to be
able to conclude whether sufficient appropriate audit evidence
had been obtained as a basis for our opinion on the consolidated
financial statements as a whole.
Accordingly, we identified 11 operating businesses which, in our
view, required an audit of their complete financial information,
either due to their size or their risk characteristics. We also
performed specific audit procedures on inventory at the Group’s
three supply chain entities and specific risk based procedures on
other financial statement line items in a further four operating
businesses and three corporate centre entities.
This, together with additional procedures performed on
centralised functions and at the Group level, gave us the evidence
we needed for our opinion on the consolidated financial
statements as a whole.
AREAS OF PARTICULAR AUDIT FOCUS
In preparing the financial statements, the Directors made a
number of subjective judgements, for example in respect of
significant accounting estimates that involved making
assumptions and considering future events that are inherently
uncertain. We primarily focused our work in these areas by
assessing the Directors’ judgements against available evidence,
forming our own judgements, and evaluating the disclosures in
the financial statements.
In our audit, we tested and examined information, using sampling
and other auditing techniques, to the extent we considered
necessary to provide a reasonable basis for us to draw
conclusions. We obtained audit evidence through testing the
effectiveness of controls, substantive procedures or a
combination of both.
We considered the following areas to be those that required
particular focus in the current year. This is not a complete list of
all risks or areas of focus identified by our audit. We discussed
these areas of focus with the Audit Committee. Their report on
those matters that they considered to be significant issues in
relation to the financial statements is set out on page 53.
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF UNILEVER PL
REPORT ON THE ONSOLIDATED FINANIAL STATEMENTS
OUR OPINION
In our opinion the consolidated financial statements:
• give a true and fair view of the state of the Group’s affairs as at
31 December 2013 and of the consolidated profit and cash
flows for the year then ended;
• have been properly prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the
European Union; and
• have been prepared in accordance with the requirements of
the Companies Act 2006 and Article 4 of the IAS Regulation.
This opinion is to be read in the context of what we say in the
remainder of the report.
SEPARATE OPINION IN RELATION TO IFRS AS ISSUED
BYTHE IASB
As explained in note 1 to the consolidated financial statements,
the Group, in addition to applying IFRS as adopted by the
European Union, has also applied IFRS as issued by the
International Accounting Standards Board (IASB).
In our opinion the consolidated financial statements comply with
IFRS as issued by the IASB.
WHAT WE HAVE AUDITED
The consolidated financial statements, which are prepared by
Unilever PLC, comprise:
• the consolidated balance sheet as at 31 December 2013;
• the consolidated income statement and consolidated
statement of comprehensive income for the year then ended;
• the consolidated statement of changes in equity and
consolidated cash flow statement for the year then ended; and
• the notes to the consolidated financial statements.
The financial reporting framework that has been applied in their
preparation comprises applicable law and IFRS as adopted by the
European Union.
WHAT AN AUDIT OF FINANCIAL STATEMENTS INVOLVES
We conducted our audit in accordance with International Standards
on Auditing (UK and Ireland) (ISAs (UK & Ireland)).
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material
misstatement, whether caused by fraud or error. This includes an
assessment of:
• whether the accounting policies are appropriate to the Group’s
circumstances and have been consistently applied and
adequately disclosed;
• the reasonableness of significant accounting estimates made
by the Directors; and
• the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information
in the Annual Report and Accounts (the Annual Report) to identify
material inconsistencies with the audited consolidated financial
statements and to identify any information that is apparently
materially incorrect based on, or materially inconsistent with, the
knowledge acquired by us in the course of performing the audit. If
we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
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Unlever Annual Report and Accounts 2013 Fnancal statements
INDEPENDENT AUDITOR’S REPORT
UNITED KINGDOM