Strategic report Governance Financial statements Other information INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HARGREAVES LANSDOWN PLC CONTINUED How we tailored the audit scope We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the group and the parent company, the accounting processes and controls, and the industry in which they operate. The group comprises 19 separate reporting units. It operates primarily in the UK, and has one Polish based subsidiary. There were 5 key operating subsidiaries during the year. We considered two subsidiaries to be financially significant reporting units, Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Fund Managers Ltd., on which we performed an audit of their complete financial information. Together these two financially significant reporting units represent 108% of the group’s consolidated profit before tax (before considering the impact of intercompany eliminations) and 97% of the group’s consolidated revenue. A reporting unit was considered to be financially significant if it contributed more than 10% of consolidated profit before tax. Specific audit procedures were also performed over consolidation adjustments, balances that could be tested centrally which included intangible assets, staff costs, cash and cash equivalents, term deposits and material movements through the consolidated statement of changes in equity. All of the audit work was performed by the group engagement team in the UK. Materiality The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Financial statements – group Financial statements – parent company Overall £18,300,000 (2020: £18,900,000). £9,800,000 (2020: £10,700,000). materiality How we 5% of consolidated profit before tax 5% of profit before tax determined it Rationale for Based on the benchmarks used in the Based on the benchmarks used in the benchmark Annual Report, profit before tax is the Annual Report, profit before tax is the primary applied primary measure used by the shareholders measure used by the shareholders in assessing in assessing the financial performance of the financial performance of the group, and is the group, and is a generally accepted a generally accepted auditing benchmark. auditing benchmark. Our approach is We have applied a consistent approach in consistent with that used in the prior year. calculating the parent company’s materiality. Our approach is consistent with that used in the prior year. 139 Hargreaves Lansdown Report and Financial Statements 2021