129 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Independent auditor’s report to the members of Vodafone Group Plc continued
An overview of the scope of the Parent company and Group audits Tailoring the scope We have followed a risk-based approach when developing our audit approach to obtain sufficient appropriate audit evidence on which to base our audit opinion. We performed risk assessment procedures, with input from our component auditors, to identify and assess risks of material misstatement of the consolidated financial statements and identified significant accounts and disclosures. When identifying components at which audit work needed to be performed to respond to the identified risks of material misstatement of the consolidated financial statements, we considered our understanding of the Group and its business environment, the potential impact of climate change, the applicable financial reporting framework, the Group’s system of internal control, the existence of centralised processes, applications and any relevant internal audit results. The goodwill balance was audited centrally by the Group audit team. In addition, we determined that certain centralised audit procedures would be performed on investments in associates and joint ventures, other investments, deferred tax assets, post-employment benefits, derivative financial instruments (classified within trade and other receivables and trade and other payables), taxation recoverable, cash and cash equivalents, equity, borrowings, deferred tax liabilities, taxation liabilities, roaming revenue (classified within revenue), other income, investment income, financing costs and one-off transactions (including the accounting for the merger with Three UK). For these audit areas, audit procedures were also performed by the Group audit team with input from Component audit teams. Vodafone has centralised processes and controls over certain areas within its Vodafone Intelligent Solutions (“VOIS”) finance shared service centre locations. The Group audit team and our audit teams at VOIS form an integrated audit team to perform centralised testing for certain controls and accounts, including procedures on property, plant and equipment, other intangible assets and centralised purchase to pay processes (impacting trade and other payables, cost of sales, selling and distribution expenses and administrative expenses). We then identified 17 components as individually relevant to the Group due to our assessment of risks of material misstatement or a significant risk impacting the consolidated financial statements. We also considered the materiality of the components relative to the Group. For those individually relevant components, we identified the significant accounts where audit work needed to be performed at these components by applying professional judgement. We considered the Group significant accounts on which centralised procedures would be performed, the reasons for identifying the component as an individually relevant component and the size of the component’s account balance relative to the Group significant financial statement account balance. We then considered whether the remaining Group significant account balances not yet subject to audit procedures, in aggregate, could give rise to a risk of material misstatement of the consolidated financial statements. Having identified the components for which work would be performed, we determined the scope to assign to each component. Of the 17 components selected, we designed and performed audit procedures, including tests of controls, on the entire financial information of 7 components (“full scope components”). For 9 components, we designed and performed audit procedures, including tests of controls, on specific
significant financial statement account balances or disclosures of the financial information of the component (“specific scope components”). For the remaining 1 component, we performed specified audit procedures to obtain evidence for one or more relevant assertions on specific account balances. Our scoping to address the risk of material misstatement for each key audit matter is set out in the Key audit matters section of the report. 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 Group audit engagement team, or by component auditors operating under our instruction. Of the 7 full scope components, audit procedures were performed on 2 of these directly by the Group audit team with the remaining 5 being performed by component audit teams. For the 9 specific scope components, the audit procedures were performed on 4 of these directly by the Group audit team with the remaining 5 being performed by component audit teams. For the 1 specified procedures scope component, audit procedures were performed by the Group audit team. Where the work was performed by component auditors, we determined the appropriate level of oversight 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. The Group audit team continued to follow a programme of planned visits that has been designed to ensure that the Senior Statutory Auditor, or another Group audit team member, visits all full and specific scope locations each year. During the current year’s audit cycle, visits were undertaken by the Group audit team to the component teams in Germany, UK, South Africa, Turkey and Egypt as well as to VOIS in India. These visits involved meetings with local management, understanding the overall audit approach, including key issues and responses as well as reviewing key work papers on risk areas. The Senior Statutory Auditor, also remotely attended audit closing meetings with component teams and management of all full scope and specific scope locations. The Group audit team interacted regularly with the component teams where appropriate, during various stages of the audit, were responsible for the scope and direction of the audit process and reviewed relevant working papers. Where relevant, the section on key audit matters details the level of involvement we had with component auditors to enable us to determine that sufficient audit evidence had been obtained as a basis for our opinion on the Group as a whole. This, together with the additional procedures performed at Group level, gave us appropriate evidence for our opinion on the consolidated financial statements. Climate change Stakeholders are increasingly interested in how climate change will impact the Group. The Group has determined that the most significant future impacts from climate change on its operations will be from its Planet activities and commitments set out on pages 28 to 32 and the material climate-related physical and transitional risks explained on pages 65 to 70 in the required Task Force for Climate related Financial Disclosures, both of which form part of the “Other information,” rather than the audited consolidated financial statements. Our procedures on these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on “Other information”.
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