Auditors' report

Independent auditors’ report to the members of the Chartered Institute of Internal Auditors


Opinion

We have audited the financial statements of the Chartered Institute of Internal Auditors (“the Institute”) for the year ended 31 March 2021 which comprise for the Group and the Institute the Income and expenditure account, the Balance Sheet, the Statement of Changes in Equity, the Cash flow statement and the Notes to the accounts, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is the United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:

  • Give a true and fair view of the state of the Group’s and of the Institute’s affairs as at 31 March 2021 and of its income and expenditure for the year then ended
  • Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
  • Have been prepared in accordance with the requirements of the Institute’s Charter and Bye-laws

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)). Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report.


Other information

The other information comprises the information other than the financial statements and our auditor’s report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.


Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Group and of the Institute and its environment obtained in the course of the audit, we have not identified material misstatements in the President’s Report and Directors’ report.

We have nothing to report in respect of the matters where we are required to consider the following matters, and to report to you if, in our opinion:

  • Adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
  • The financial statements are not in agreement with the accounting records and returns; or
  • We have not received all the information and explanations we require for our audit

Responsibilities of the directors

As explained more fully in the Directors’ responsibilities statement set out on page 6, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Group’s and of the Institute’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Institute or to cease operations, or have no realistic alternative but to do so.


Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Based on our understanding of the Group and the environment in which it operates, we identified that the principal risks of non-compliance with laws and regulations related to its Charter and Bye-Laws, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as income tax, payroll tax and sales tax.
Financial Statements for 2020-21 V9 - FINAL DRAFT at 15:51:24 Tuesday 3 August 2021
Chartered Institute of Internal Auditors – Report and Accounts 2020/21 8

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to revenue and management bias in accounting estimates. Audit procedures performed by the engagement team included:

  • Inspecting correspondence with regulators and tax authorities
  • Discussions with management including consideration of known or suspected instancesof non-compliance with laws and regulation and fraud
  • Evaluating management’s controls designed to prevent and detect irregularities
  • Identifying and testing journals, in particular journal entries posted with unusual accountcombinations, postings by unusual users or with unusual descriptions
  • Challenging assumptions and judgements made by management in their criticalaccounting estimates; and
  • Agreeing the validity of recognised receivables on a sample basis and challenging therecoverability assumptions, further assessing for any fraud or bias

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.


Use of our report

This report is made solely to the Institute’s members, as a body, in accordance with the Institute’s Charter and Bye-laws. Our audit work has been undertaken so that we might state to the Institute's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Institute and the Institute's members as a body, for our audit work, for this report, or for the opinions we have formed.



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