Page 52 - Beeks Financial Cloud Group Annual Report 2021

50 Beeks Financial Cloud Group PLC For the year ended 30 June 2021

Independent Auditors’ Report to the members of Beeks Financial Cloud Group PLC

Key Audit Matter How our scope addressed the matter

Revenue recognition In responding to the key audit matter, we performed
We identified revenue recognition as one of the most the following audit procedures:
significant assessed risks of material misstatement due We utilised revenue data analytics on private and
to fraud. wholesale revenue streams to identify any anomalies,
being transactions the software identifies that falls
Group revenue recognised in the year has grown out with the standard posting cycle. Any anomalies
from £9.4m last year to £11.6m for the year ended 30 identified were followed up with management and
June 2021. traced to supporting evidence;
In addition to this, a substantive sample of invoices was
We have pinpointed the significant risk in revenue selected for testing to gain further evidence over the
to be the impact of contract assets and contract occurrence of these sales;
liabilities adjustment made at year end due to Using the IFRS 15 technical paper provided by
the manual process and judgement involved in management, we have obtained relevant invoices,
determining the satisfaction of the performance delivery notes and sales orders to agree the treatment
obligation. This differs from the revenue recognised, of accrued and deferred income. The entries were
and received, in the year where we note there is less traced into the consolidated statement of financial
judgement involved. position with the corresponding consolidated
statement of comprehensive income impact
In addition to this, the application of International confirmed as the movement between the opening and
GOVERNANCE
Financial Reporting Standard (IFRS) 15 ‘Revenue from closing position;
Contracts with Customers’, specifically in relation A sample of hardware sales and one-off sales
to management judgement and complexities recognised at year end were traced to goods
regarding the revenue recognised under contract dispatched notes or relevant supporting
accounting within Velocimetrics Limited, is documentation such as timesheets for professional
considered a significant risk.. services to ensure revenue is recognised at the correct
We also identified a significant risk regarding the point in time, being when control is passed to the
recognition of non-recurring elements of revenue customer, or when the service has been provided;
and hardware sales around the year end to ensure We obtained an updated paper on the application
the risks and rewards of the goods had passed to the of IFRS 15 specific to Velocimetrics Limited and, via
customer prior to the year end. a sample, assessed whether the revenue has been
recognised in line with the framework by reviewing
both existing and new revenue contracts and creating
expectations, comparing against actual revenue
recognised. This included selecting samples of contract
assets and contract liabilities and testing these for
accuracy; and
We reviewed and assessed the revenue recognition
policies at a group level for appropriateness.

Relevant disclosures in the Annual Report 2021 Our results

/ Financial statements: Note 1 - Summary of Overall, our audit testing did not identify any evidence
significant accounting policies, Revenue recognition of material misstatement in respect of group revenue
and Note 2 – Critical accounting judgements and recognition.
key sources of estimation uncertainty, Revenue;
/ Strategic Report: Financial performance, Revenue;
and
/ Strategic Report: Principal risks and uncertainties,
Terms of client contracts.