Auditor’s 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 auditor’s 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: We obtained a general understanding of the association’s legal and regulatory framework through enquiry of management concerning their understanding of relevant laws and regulations and the entity’s policies and procedures regarding compliance. We also drew on our existing understanding of the association’s industry and regulation. We understand that the association complies with the framework through: • Updating operating procedures, manuals and internal controls as legal and regulatory requirements change; • A programme of internal audit performed by an independent firm of internal auditors; • A risk assessment framework and register that includes regular review and scrutiny by the Board and Audit and Risk Committee; • An annual assessment of compliance with regulatory standards as applied to Registered Providers and enforced by the Regulator of Social Housing; and • The Board’s close oversight through regular Board meetings and compliance reporting. In the context of the audit, we considered those laws and regulations: which determine the form and content of the financial statements; which are central to the association’s ability to conduct its business; and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the association: • FRS 102, the requirements of the Co-operative and Community Benefit Societies Act 2014, the Housing and Regeneration Act 2008 and the Accounting Direction for Private Registered Providers of Social Housing 2019, in respect of the preparation and presentation of the financial statements; • Health and safety regulations; and • Regulatory standards as applied to Registered Providers and enforced by the Regulator of Social Housing. We performed the following specific procedures to gain evidence about compliance with the significant laws and regulations above: • Making enquiries with management and the Audit and Risk Committee as to the risks of non-compliance and any instances thereof; and • Performed a review of Board minutes to identify any indicators of known or suspected non-compliance with significant laws and regulations; and • Reviewed any correspondence between the Regulator of Social Housing and the association. The senior statutory auditor led a discussion with senior members of the engagement team regarding the susceptibility of the association’s financial statements to material misstatement, including how fraud might occur. The key areas identified as part of the discussion were with regard to the manipulation of the financial statements through manual journal entries. The procedures carried out to gain evidence in the above areas included: • Testing of a sample of manual journal entries, selected through applying specific risk assessments applied based on the association’s processes and controls surrounding manual journal entries; and • Reviewing and challenging estimates made by management. A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/ auditorsresponsibilities. This description forms part of our auditor’s report. Use of our report This report is made solely to the association’s members, as a body, in accordance with section 87 of the Co-operative and Community Benefit Societies Act 2014. Our audit work has been undertaken so that we might state to the association’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the association and the association’s members as a body, for our audit work, for this report, or for the opinions we have formed. AndrewBond Senior Statutory Auditor, for and on behalf of CLA Evelyn Partners Limited Statutory Auditor Chartered Accountants 45 Gresham Street London EC2V 7BG 14 September 2022 46 ARHAG
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