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Responsibilities for the financial statements and the audit

Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors' Responsibilities in respect to the Financial
Statements, the directors are responsible for the preparation of the financial statements in accordance
with the applicable framework and for being satisfied that they give a true and fair view. The directors are
also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.

Based on our understanding of the Company and industry, we identified that the principal risks of non-
compliance with laws and regulations related to the Financial Conduct Authority’s regulations, the
Prudential Regulation Authority’s regulations and UK tax legislation, and we considered the extent to
which non-compliance might have a material effect on the financial statements. We also considered those
laws and regulations that have a direct impact on the financial statements such as the Companies Act
2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the principal risks
were related to the posting of inappropriate manual journal entries to manipulate financial performance
and management bias in significant accounting estimates. Audit procedures performed by the
engagement team included:

● Review of internal audit and compliance monitoring findings throughout the year;
● Reading key correspondence with the Financial Conduct Authority and Prudential Regulation
Authority;
● Incorporation of an element of unpredictability in our testing through altering the nature, timing
and/or extent of work performed;
● Challenging assumptions and judgements made by management in their significant accounting
estimates;
● Identifying and testing journal entries, in particular any journal entries posted by senior management,
posted with descriptions indicating a higher level of risk, posted to unusual account combinations
based on our understanding of usual business operations, and material late adjustments.

There are inherent limitations in the audit procedures described above. We are less likely to become
aware of instances of non-compliance with laws and regulations that are not closely related to events and
transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement