In our evaluation of the Directors’ conclusions, we considered the inherent risks to the Syndicate’s business model and analysed how those risks might affect the Syndicate’s financial resources or ability to continue operations over the going concern period, including inspecting correspondence with the Council of Lloyd’s to assess whether there were any known impediments to establishing a further year of account.Our conclusions based on this work:
•we consider that the Directors’ use of the going concern basis of accounting in the preparation of the Syndicate annual accounts is appropriate; and
•we have not identified, and concur with the Directors’ assessment that there is not, a material uncertainty related to events or conditions that, individually or collectively, may cast significant doubt on the Syndicate’s ability to continue as a going concern for the going concern period.
However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were reasonable at the time they were made, the above conclusions are not a guarantee that the Syndicate will continue in operation.
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
•Enquiring of directors, the audit committee, internal audit, compliance, legal and risk and inspection of policy documentation as to the Syndicate and Managing Agent’s high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Syndicate and Managing Agent’s channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
•Reading Board, audit committee, and risk and solvency committee minutes.
•Considering remuneration incentive schemes and performance targets for management and directors.
•Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit.
As required by auditing standards, and taking into account possible pressures to meet profit targets and our overall knowledge of the control environment, we perform procedures to address the risk of management override of controls, in particular the risk that management may be in a position to make inappropriate accounting entries, and the risk of bias in accounting estimates and judgements such as
