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Annual Report & Accounts 2015 - INDEPENDENT AUDITOR'S REPORT
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We use a different level of materiality, performance materiality, to drive the extent of our testing and this was set at 75% of financial statement materiality for the audit of the Group financial statements. We also determine a lower level of specific materiality for certain areas such as directors' remuneration and related party transactions. We determined the threshold at which we will communicate misstatements to the audit committee to be €85,000. in addition we will communicate misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. overview of the scope of our audit 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 to identify material inconsistencies with the audited 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. We conducted our audit in accordance with international standards on auditing (isas) (uK and ireland). our responsibilities under those standards are further described in the 'responsibilities for the financial statements and the audit' section of our report. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Group in accordance with the auditing practices Board's ethical standards for auditors, and we have fulfilled our other ethical responsibilities in accordance with those ethical standards. our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level. the Group's activities are spread across 57 wholly owned statutory entities. the components of the Group were evaluated by the Group audit team based on a measure of materiality, considering each as a percentage of total Group assets, revenues and earnings before tax, to assess the significance of each component and to determine the planned audit response. for those components that were deemed significant either a full scope, targeted or analytical audit approach was determined based on their relative materiality to the Group and our assessment of audit risk. for significant components requiring a full scope approach we evaluated and tested controls over the financial reporting systems identified as part of our risk assessment, reviewed the accounts production process and addressed critical accounting matters. Based on this assessment we focused on the Group's operations based in the uK, ireland and malta, which were subject to a full audit for the year ended 31 december 2015. We used a Grant thornton network member firm to complete the audit work of the operations in malta under our supervision and review. the remaining entities were subject to a targeted or analytical approach. our audit was executed at levels of materiality applicable to each individual entity which were lower than Group materiality and ranged from €1,275k to €1,700k. at the parent entity level we performed audit procedures on material transactions and consolidation adjustments. as a consequence of the audit scope determined, we achieved full scope coverage of 100% of the Group's revenue, 99% of the Group's net assets, 100% of the Group's profit making components and 92% of the Group's loss making components. as the Group's parent company is based in the isle of man we used a Grant thornton network member firm to check the requirements of local isle of man statute had been met in the disclosures included in the annual report. in the current year the Group audit team visited the operations in ireland and malta, due to their financial significance to the Group. 44 GVC HOLDINGS PLC ANNUAL REPORT 2015 independent auditor's report to tHe memBers of GVc HoldinGs plc continued