Strategic report Governance Financial statements Other information AUDIT COMMITTEE REPORT CONTINUED •Revenue recognition.The Committee considered the veracity • Contingent liabilities. The Committee reviewed and carefully struck between the articulation of successes, opportunities, of the Group’s revenue streams in the period, which continue to considered the contingent liabilities for the Group. Full details challenges and risks. In addition to considering its content, the be non-complex and primarily consist of high-volume, low value of the matters considered can be found in note 5.3 to the Committee also oversees the process for preparing the Report transactions. The Committee receives assurance on revenue consolidated financial statements on page 164. and Financial Statements. calculations both internally through its oversight of the Group’s Remuneration. The Committee considered the accounting In particular, the Committee has ensured that an appropriate CASS controls and from the external auditor’s approach to • recalculate the Group’s significant revenue streams and carry impact of the proposed changes to a new Sustained senior manager is accountable for the preparation of each section, out sample testing on the remainder. In addition the external Performance Plan within the Remuneration Policy. Changes with overall responsibility for coordinating production being auditors reviewed and sample tested the operational relate to deferral rates and vesting periods and are driven from assigned to the Chief Financial Officer. transactions that drive the revenue to ensure that these were the requirements of the Investment Firm Regulation and External Audit being booked in a timely and accurate fashion. Investment Firm Directive along with shareholder feedback. The Committee is responsible for overseeing the Group’s Going concern. The Committee reviewed the going concern As Hargreaves Lansdown Asset Management Limited is an relationship with its external auditor, PwC, which has been retained • enhanced firm under the Senior Managers & Certification Regime since the Group’s last competitive tender process run in relation to position for each group entity. but does not have a separate Audit Committee, the Committee the financial year ended 30 June 2014. •Carrying value of investment in subsidiary.The valuation model reviewed the Hargreaves Lansdown Asset Management Limited In addition to oversight of the audit process itself, the Committee of HLSL was reviewed in detail by the Committee and they accounts for recommendation to the board of that company. is responsible for monitoring the Group’s other interactions with concluded that a £16 million impairment of HL plc’s investment Report and Financial Statements and interim results the external auditor to ensure that its independence and in HLSL was required. They also reviewed the capitalised In addition to considering significant accounting issues, policies objectivity are maintained. development cost in HLSL against this model and concluded and judgements throughout the year, the Committee plays an that no impairment was required. Full details of the value of important role in the production of the Report and Financial External audit process intangible assets capitalised and the policies applied can be Statements and interim results. This includes reviewing and During the period, the Committee has overseen the end-to-end found in note 2.2 to the consolidated financial statements on challenging the assumptions that support the use of the going audit process. The Committee reviewed and approved the external pages 152 to 153. concern basis for the preparation of the financial statements auditor’s engagement letter and the detailed audit plan to ensure Tax. The Committee received reporting on and considered tax and the statement given by the Directors as to the Company’s consistency of scope. In approving the proposed audit fees, the • Committee paid particular attention to ensuring they were matters impacting the Group, including overseas withholding longer-term viability, which can be found on page 52. appropriate to enable an effective and high-quality audit. tax, FATCA and HMRC’s Corporate Criminal Offence. The Committee also undertakes a wider review of the content of COVID-19. The Committee continued to consider the potential the Report and Financial Statements to advise the Board as to The external auditor provided an update to the Committee at its • June meeting on progress of the audit, before submitting a formal impact of the COVID-19 pandemic on the Group’s performance whether, taken as a whole, it is fair, balanced and understandable report in August following the completion of the audit process. The and financial reporting. The Committee has spent time and provides the information necessary for shareholders to Committee reviewed the findings with the external auditor, which considering the implications of the pandemic on the Group’s assess the Group’s performance, business model and strategy. included a discussion of key audit and accounting matters including business models. In addition, the Committee has spent This supports the Board in providing the confirmations set out significant judgements of which there were determined to be additional time with both the Group’s Finance and Internal Audit on page 134. none, and its views on its i tions with Executive management functions to receive assurance on the quality of the Group’s nterac . financial reporting and any issues and judgements made in In considering the wider content of the Report and Financial The Committee also reviewed and recommended to the Board connection with its preparation. Statements, the Committee pays particular attention to ensuring that it signs the representation letter requested by the external the narrative sections provide context for, and are consistent with, auditor in respect of its audit of the financial statements. the financial statements, and that an appropriate balance is 83 Hargreaves Lansdown Report and Financial Statements 2021