Strategic report Governance Financial statements Other information INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HARGREAVES LANSDOWN PLC CONTINUED Given that revenue is material to the group and is an important determinant of the We recalculated fund management fees using confirmations of daily net asset values provided by the third-party fund group’s results we also performed testing to address other aspects of revenue administrator and published annual management charge rates. We reviewed the third-party fund administrator’s annual recognition, where we had concluded that the risk of misstatement was not controls report considering key controls over the net asset values we had used in our testing. heightened. These related to other revenue streams such as fund management fees We tested whether revenue had been completely recorded and recorded in the correct period, by selecting a sample of calculated by the third-party fund administrator, as well as characteristics such as transactions around the period end to assess whether the effective date was correct within the administration system whether revenues had occurred, been completely recorded, and recorded in the revenue calculations. We obtained evidence in respect of the occurrence of revenue recorded by the group from testing correct period. a sample of transactions to corroborating evidence such as client instructions and third party settlement records, and from our testing of selected bank reconciliations. No exceptions were noted from this testing. Key audit matter: Impact of COVID-19 (group and parent) We consider the impact of COVID-19 on the group and parent to be a key audit matter as the impacts of the pandemic continue to cause significant social and economic disruption up to the date of reporting. Management has updated their inherent risk assessment and plans, and prepared an updated going concern assessment based on this future outlook. Area of focus How our audit addressed the key audit matter We considered the impact on our audit work, since it has continued Our audit procedures included steps to evaluate and validate the reliability and authenticity of information recorded to be performed remotely. and shared electronically. These have included call back procedures to third party banks, and where we aim to rely on transactions from excel bank statements provided by management, we have traced a sample of transactions back to the online bank portal. We considered the impact COVID-19 has had on internal controls related We enquired of management, Operations, IT, Internal Audit and Risk as to changes and/or issues relating to the internal to financial reporting. control environment due to COVID-19, and evaluated the results of our walkthrough and controls testing. We also reviewed minutes of Board and Committee meetings during the year, complaints records, as well as correspondence with external stakeholders and we considered the results of other testing procedures to support these enquiries. We considered the impact on operations and management’s assessment We reviewed management’s assessment of the appropriateness of the use of the going concern basis for the group’s of going concern, and related disclosures. and parent company’s financial statements. We also evaluated the appropriateness of the downside scenarios considered within the assessment. In doing so we reviewed supporting evidence, including the group’s operating plans, regulatory capital assessments, and assessed whether they had appropriately considered the potential impact of COVID-19 on the group’s plans and forecast financial performance. We enquired as to the extent to which any issues had been identified with cyber security arrangements, in view of the groups’ technology dependent operating environment. We enquired as to the impact of COVID-19 at the group’s key market counterparties, technology providers and other service providers. We also obtained controls reports and bridging letters for selected service providers that covered the audited period. Based on the testing and enquiries noted above, and supplemented with the results of all other audit work performed, we concluded that the impact of COVID-19 has been appropriately evaluated and reflected in the preparation of the financial statements. 138 Hargreaves Lansdown Report and Financial Statements 2021