154 ITV plc Annual Report and Accounts 2023 ITV plc Annual Report and Accounts 2023 155 F I INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF ITV PLC NAN CONTINUED C I AL Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance S T Statement is materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not A T to add or draw attention to in relation to: detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve E M deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. E N • The Directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks T • The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. S explanation of how these are being managed or mitigated However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to • The Directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a accounting in preparing them, and their identification of any material uncertainties to the Group’s and Company’s ability to continue to do conclusion about the population from which the sample is selected. so over a period of at least twelve months from the date of approval of the financial statements • The Directors’ explanation as to their assessment of the Group’s and Company’s prospects, the period this assessment covers and why A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: the period is appropriate www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors’ Report. • The Directors’ statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and Use of this report meet its liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of qualifications or assumptions Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any Our review of the Directors’ statement regarding the longer-term viability of the Group and Company was substantially less in scope than an other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our audit and only consisted of making inquiries and considering the Directors’ process supporting their statement; checking that the statement prior consent in writing. is in alignment with the relevant provisions of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and understanding of the Group and Company and their environment obtained in the course of OTHER REQUIRED REPORTING the audit. Companies Act 2006 exception reporting we have concluded that each of the following elements of the corporate Under the Companies Act 2006 we are required to report to you if, in our opinion: In addition, based on the work undertaken as part of our audit, governance statement is materially consistent with the financial statements and our knowledge obtained during the audit: • we have not obtained all the information and explanations we require for our audit or • The Directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the • adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from information necessary for the members to assess the Group’s and Company’s position, performance, business model and strategy branches not visited by us or • The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems • certain disclosures of Directors’ remuneration specified by law are not made or • The section of the Annual Report describing the work of the Audit and Risk Committee • the Company financial statements and the part of the Remuneration Report to be audited are not in agreement with the accounting records and returns We have nothing to report in respect of our responsibility to report when the Directors’ statement relating to the Company’s compliance with the Code does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by We have no exceptions to report arising from this responsibility. the auditors. Appointment Responsibilities for the financial statements and the audit Following the recommendation of the Audit and Risk Committee, we were appointed by the members on 29 April 2021 to audit the Responsibilities of the Directors for the financial statements financial statements for the year ended 31 December 2021 and subsequent financial periods. The period of total uninterrupted engagement As explained more fully in the Statement of Directors’ Responsibilities, the Directors are responsible for the preparation of the financial is three years, covering the years ended 31 December 2021 to 31 December 2023. statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The Directors are also OTHER MATTER responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In due course, as required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements will form part of the ESEF-prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Company’s ability to continue as a Authority in accordance with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the the annual financial report will be prepared using the single electronic format specified in the ESEF RTS. Directors either intend to liquidate the Group or the Company 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, Jonathan Lambert (Senior Statutory Auditor) whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, for and on behalf of PricewaterhouseCoopers LLP but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Chartered Accountants and Statutory Auditors Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be London expected to influence the economic decisions of users taken on the basis of these financial statements. 7 March 2024 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 industry, we identified that the principal risks of non-compliance with laws and regulations related to competition law, data privacy, broadcasting and media regulations and UK Listing Rules, 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 financial statements such as the Companies Act 2006 and tax legislation. 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 manipulate the financial performance of the Group and management bias in accounting estimates. The Group engagement team shared this risk assessment with the component auditors so that they could include appropriate audit procedures in response to such risks in their work. Audit procedures performed by the Group engagement team and/or component auditors included: • Enquiry of management, those charged with governance and the Group’s internal and external legal counsel around actual and potential fraud and non-compliance with laws and regulations • Discussion with external lawyers regarding significant legal matters • Enquiry of tax and compliance functions to identify any instances of non-compliance with laws and regulations • Challenging assumptions made by management in determining their significant judgements and accounting estimates (refer to key audit matters) • Identifying and testing journal entries, in particular journal entries posted with unusual account combinations • Reviewing financial statement disclosures and testing to supporting documentation