127 Vodafone Group Plc Annual Report 2024
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The table below illustrates the coverage obtained from the work performed by our audit teams.
2024
2023
% of Group Adjusted EBITDAaL*
% of Group Revenue
% of Group Adjusted
Reporting components Full scope Specific scope Specified procedures
Number
Note
Number
EBITDAaL* % of Group Revenue
9 4 6
72%
65% 14% 79% – 21%
1,2,3,6
9 4 6
74%
69% 11% 80% – 20%
4
– –
– –
3,5,7 7,8,9
Full and specified procedures coverage Remaining components Total reporting components
19 300 319
72% 28%
19 295 314
74% 26%
100% 100% 100% 100% 1. Two of the nine full scope components relate to Vodafone Italy and Vodafone Spain, which were classified as discontinued operations in accordance with IFRS 5 during the year. As such, they do not contribute to the Group’s Adjusted EBITDAaL or Group revenue from continuing operations. 2. Two further full scope components relate to the Company and another corporate entity whose activities include consolidation adjustments, which are audited by the primary audit team. Procedures on three of the other full scope locations are undertaken by component audit teams based in Germany and the remaining two full scope components are South Africa and the UK. 3. The Group audit risks in relation to revenue recognition were subject to audit procedures at each of the full and specified procedures scope locations with significant revenue streams (being seven full scope components and three specified procedures components). 4. The primary audit team performed full audit procedures on specific accounts in respect of four finance and corporate entities across a range of significant accounts. The audit procedures did not include testing of all significant accounts of the components, but will have contributed to the coverage of significant accounts selected for testing by the primary audit team. 5. Specified procedures were performed over six entities across a range of significant accounts with three of these performed by component teams in Turkey, Egypt and Greece and the rest by the primary audit team. The audit procedures did not include testing of all significant accounts of the components, but will have contributed to the coverage of significant accounts selected for testing by the primary audit team. 6. The Group audit risks in relation to ‘Carrying value of cash generating units, including goodwill’ and ‘Recognition and recoverability of deferred tax assets on tax losses – Luxembourg’ were subject to audit procedures by the primary audit team on the entire balance, with support from component audit teams on certain procedures. 7. The contribution of specified procedures components to Group Adjusted EBITDAaL is included within ‘remaining components’, as audit procedures were performed on certain, but not all, significant accounts of the specified procedures components contributing to Group Adjusted EBITDAaL. 8. Included within the Group’s reporting components are the Group’s joint venture investments and associate investments, which are detailed in Note 12 of the consolidated financial statements, which were subject to other procedures. 9. Changes in the number of remaining components compared to prior year reflect increases in the number of entities within the Group’s consolidation system. * Adjusted EBITDAaL as defined in ‘Our application of materiality’ section of this report and is based on continuing operations only. This metric has the same definition as the Group’s Adjusted EBITDAaL Non-GAAP measure defined on page 236 of the Annual Report. Changes from the prior year
The primary audit team continued to follow a programme of planned visits that has been designed to ensure that the Senior Statutory Auditor visits key locations on a rotational basis. In the current year the Senior Statutory Auditor and other team members visited component teams in Germany, UK, Italy and South Africa. The Senior Statutory Auditor, also remotely attended audit closing meetings with component teams and management of all full scope locations. In addition, visits were undertaken by members of the primary audit team to the component teams in Spain, Greece, Turkey, Egypt and VOIS India. These visits involved meetings with local management, understanding the overall audit approach, including key issues and response as well as reviewing key work papers on risk areas. The primary audit team interacted regularly with the local EY full scope and specified procedures component teams where appropriate, during various stages of the audit, reviewed relevant working papers and were responsible for the scope and direction of the Group audit process. We maintained continuous and open dialogue with the component audit teams, in addition to holding formal meetings to ensure that we were fully aware of their progress and the results of their procedures. Close meetings for full, specific, and specified audit procedures components (excluding those performed by the primary audit team) were held via video conference in April 2024 and were attended by the Senior Statutory Auditor and/or other members of the primary audit team. This, together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the consolidated financial statements.
The approach to audit scoping is similar to the prior year audit, with the rotation of markets, designated as specified procedures scope for selected significant accounts, to extend the Group audit procedures beyond the Group’s main markets and to introduce a level of unpredictability through risk-based testing. This approach resulted in: – specified procedures scope being assigned to the component in Greece, which was not subject to direct audit procedures in the prior year; and – The component in Portugal being assessed as a ‘Remaining component’ in the current year. Involvement with component teams In establishing our overall approach to the Group audit, we determined the type of work that needed to be undertaken at each of the components by us, as the primary audit team, or by component auditors from other EY global network firms operating under our instruction. Of the nine full scope components, audit procedures were performed on two of these directly by the primary audit team with the remaining seven being performed by component audit teams. For the four specific scope components, the procedures were performed directly by the primary audit team. For the six specified procedures scope components, work was performed directly by the primary audit team for three of these, with the remaining three being performed by component audit teams. Where the work was performed by component auditors, we determined the appropriate level of involvement to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the consolidated financial statements as a whole. Vodafone has centralised processes and controls over certain areas within its Vodafone Intelligent Solutions (“VOIS”) finance shared service centre locations. The primary audit team performs direct oversight, review, and coordination of the EY audit teams at VOIS, whose work includes centralised testing for certain controls and accounts, including procedures on leases, fixed assets, intangible assets, cash and centralised purchase to pay processes.
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