Page 157 - ACCESS BANK ANNUAL REPORTS_eBook

This is considered a key audit matter in the separate finan- We have also assessed the adequacy of the Group’s dis-
cial statements only. closures including the accuracy of the categorisation into
the fair value measurement hierarchy and adequacy of the
disclosure of the valuation techniques.

Disclosure of the impact of IFRS 9 transition
On 1 January 2018, the Group transitioned to financial We obtained the bank’s new financial instrument classifi-
instruments accounting standard IFRS 9 which replaced cation and measurement policy and checked that it met
IAS39. the requirements of IFRS 9.

The estimated transition impact is disclosed in the consol- We checked management’s estimate of the transition
idated and separate financial statement in accordance adjustment by focusing on:
with IAS 8.
• model development, validation and approval to en-
We focused on this area because of the significant judge- sure compliance with IFRS 9 requirements;
ment applied by management in estimating the impair-
ment allowances under an expected credit loss (ECL) • review and approval of key assumptions, judgements
model. and forward looking information prior to use in the
ECL model; and
The new IFRS 9 standard introduces new requirements
around the classification and measurement of financial • the integrity of data used as input to the model;
instruments, potentially resulting in fair value differences. With the assistance of our credit modelling experts, we
In order to meet the requirements of the new standard, reviewed the judgements and assumptions supporting
significant changes have also been made to systems, pro- management’s determination of Probability of Default,
cesses and controls with effect from 1 January 2018.
Loss Given Defaultand staging assessment used in the
ECLs are expected to incorporate forward looking modelling of expected credit losses.
information, reflecting management’s view of potential We assessed reasonableness of forward looking mac-
impacts of future economic environments on the impair- ro-economic information incorporated into the impair-
ment charge. The bank’s estimates of ECL also reflects an ment calculations by using our experts to review the
unbiased and probability weighted amount determined by assumptions and methodology.
evaluating a range of multiple economic scenarios.
We assessed the adequacy of the underlying disclosures
These complexities require management to develop new related to the transition impact.
methodologies involving the use of significant assump-
tions and judgements.

This is considered a key audit matter in both the consoli-
dated and separate financial statements.

Other information

The directors are responsible for the other information. The other information comprises: Corporate Information, Di-
rectors’ Report, Corporate Governance Report, Statement of Directors’ Responsibilities, Report of the Statutory Audit
Committee, Risk Management Framework Report, Customer Complaints and Feedback, Value Added Statementand
Five Year Financial Summary (but does not include the consolidated and separate financial statements and our auditor’s
report thereon), which we obtained prior to the date of this auditor’s report, and Business and Financial Highlights Report,
Locations and Offices, Chairman’s Statement, Chief Executive’s Review, Corporate Philosophy, Report of the External
Consultant, Commercial Banking, Business Banking, Personal Banking, Corporate and Investment Banking, Transactions
Services & Settlement Banking, Operations and Information Technology, Digital Banking, Our People, Culture and Diversity
and Sustainability Report, Shareholder information and Corporate information which are expected to be made available to
us after that date.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially inconsistent with the

Access BAnk Plc 157
Annual Report & Accounts 2017