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AN OVERVIEW OF THE as well as differences below that threshold that, in our
SCOPE OF OUR AUDIT view, warranted reporting on qualitative grounds.

Tailoring the Scope We evaluate any uncorrected misstatements against
both the quantitative measures of materiality discussed
above and in light of other relevant qualitative
Our assessment of audit risk, our evaluation of
considerations in forming our opinion.
materiality and our allocation of performance materiality
determine our audit scope for the Foundation Trust. Other Information
This enables us to form an opinion on the financial
statements. We take into account size, risk profile, the
The other information comprises the information
organisation of the Foundation Trust and effectiveness
included in the annual report on pages 6-194, other
of controls, including controls and changes in the
than the financial statements and our auditor’s report
business environment when assessing the level of work
thereon. The directors are responsible for the other
to be performed. All audit work was performed directly
information.
by the audit engagement team.
Materiality Our opinion on the financial statements does not
cover the other information and, except to the extent
otherwise explicitly stated in this report, we do not
The magnitude of an omission or misstatement that,
express any form of assurance conclusion thereon.
individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the
users of the financial statements. Materiality provides a We read all the financial and non-financial information
in the Annual Report and Accounts to identify material
basis for determining the nature and ex tent of our audit
inconsistencies with the audited financial statements
procedures.
and to identify any information that is apparently
materially incorrect based on, or materially inconsistent
We determined materiality for the Trust to be £2.48
million, which is 1% of operating expenditure. We with, the knowledge acquired by us in the course
of performing the audit. If we become aware of any
believe that operating expenditure provides us with a
apparent material misstatements or inconsistencies we
reasonable basis for determining materiality as it is the
consider the implications for our report.
key driver of the Trust’s financial position.
We have nothing to report in this regard.
During the course of our audit, we reassessed initial
materiality and updated to take into account the Opinion on Other Matters Prescribed
reported actual financial position at year end.
by the Code of Audit Practice issued
Performance Materiality by the NAO

The application of materiality at the individual In our opinion:
account or balance level. It is set at an amount to
• the information given in the performance report and
reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected accountability report for the financial year for which
the financial statements are prepared is consistent
misstatements exceeds materiality
with the financial statements; and
On the basis of our risk assessments, together with our • the parts of the Remuneration and Staff report
assessment of the Trust’s overall control environment, identified as subject to audit has been properly
our judgement was that performance materiality was prepared in accordance with the NHS Foundation
50% of our planning materiality, namely £1.24 million. Trust Annual Reporting Manual 2017/18.
We have set performance materiality at this percentage
due to this being our first year as Trust auditor. Matters on Which We Report by

Reporting Threshold Exception
The Code of Audit Practice requires us to report to you
An amount below which identified misstatements are
if
considered as being clearly trivial.
• We issue a report in the public interest under
We agreed with the Audit Committee that we would schedule 10(3) of the National Health Service Act
report to them all uncorrected audit differences in 2006;
excess of £0.12 million, which is set at 5% of materiality,

Alder Hey Children’s NHS Foundation Trust 198 Annual Report & Accounts 2017/18