Strategic report Governance Financial statements Other information INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF HARGREAVES LANSDOWN PLC CONTINUED For each component in the scope of our group audit, we allocated a materiality that is less than Based on the work we have performed, we have not identified any material uncertainties relating to our overall group materiality. The range of materiality allocated across components was between events or conditions that, individually or collectively, may cast significant doubt on the group’s and the £4,200,000 and £16,500,000. Certain components were audited to a local statutory audit materiality parent company’s ability to continue as a going concern for a period of at least twelve months from that was also less than our overall group materiality. when the financial statements are authorised for issue. We use performance materiality to reduce to an appropriately low level the probability that the In auditing the financial statements, we have concluded that the directors’ use of the going concern aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, basis of accounting in the preparation of the financial statements is appropriate. we use performance materiality in determining the scope of our audit and the nature and extent of However, because not all future events or conditions can be predicted, this conclusion is not a our testing of account balances, classes of transactions and disclosures, for example in determining guarantee as to the group’s and the parent company’s ability to continue as a going concern. sample sizes. Our performance materiality was 75% of overall materiality, amounting to £13,700,000 for the group financial statements and £7,300,000 for the parent company financial statements. In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, In determining the performance materiality, we considered a number of factors – the history we have nothing material to add or draw attention to in relation to the directors’ statement in the of misstatements, risk assessment and aggregation risk and the effectiveness of controls – financial statements about whether the directors considered it appropriate to adopt the going and concluded that an amount in the middle of our normal range was appropriate. concern basis of accounting. We agreed with the Audit Committee that we would report to them misstatements identified during Our responsibilities and the responsibilities of the directors with respect to going concern are our audit above £900,000 (group audit) (2020: £945,000) and £500,000 (parent company audit) described in the relevant sections of this report. (2020: £533,000) as well as misstatements below those amounts that, in our view, warranted reporting Reporting on other information for qualitative reasons. The other information comprises all of the information in the Annual Report other than the financial Conclusions relating to going concern statements and our auditors’ report thereon. The directors are responsible for the other information. Our evaluation of the directors’ assessment of the group’s and the parent company’s ability Our opinion on the financial statements does not cover the other information and, accordingly, we do to continue to adopt the going concern basis of accounting included: not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon. •Obtaining, evaluating and challenging management’s updated going concern assessment In connection with our audit of the financial statements, our responsibility is to read the other (specifically covering operational resilience, current and projected capital and liquidity positions, information and, in doing so, consider whether the other information is materially inconsistent with and the appropriateness of downside scenarios) using our knowledge of the group’s business the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially performance and review of regulatory correspondence. misstated. If we identify an apparent material inconsistency or material misstatement, we are required •Agreeing cash flow forecasts to the Board approved operating plan (which is used in management’s to perform procedures to conclude whether there is a material misstatement of the financial assessment) and performing lookback testing over budgeted versus actual results for the previous statements or a material misstatement of the other information. If, based on the work we have year to assess the historical accuracy of management’s forecasting. performed, we conclude that there is a material misstatement of this other information, we are Considering information obtained during the course of the audit and publicly available market required to report that fact. We have nothing to report based on these responsibilities. • information to identify any evidence that would contradict management’s assessment of the With respect to the Strategic report and Directors’ report, we also considered whether the disclosures impact of COVID-19. required by the UK Companies Act 2006 have been included. •Enquiring and understanding the actions taken by management to mitigate the impacts of COVID-19, including review of Risk and Audit Committee meeting minutes. 140 Hargreaves Lansdown Report and Financial Statements 2021