Independent auditor’s report - KPMG Integrated report 2023/2024

To: the general meeting and the supervisory board of KPMG N.V.

Report on the audit of the financial statements 2023/2024

Our opinion

In our opinion:

the consolidated financial statements of KPMG N.V. together with its subsidiaries (‘the Group’) give a true and fair view of the financial position of the Group as at 30 September 2024 and of its result and cash flows for the year then ended in accordance with IFRS Accounting Standards as endorsed by the European Union (‘EU-IFRS’) and with Part 9 of Book 2 of the Dutch Civil Code;
the company financial statements of KPMG N.V. (‘the Company’) give a true and fair view of the financial position of the Company as at 30 September 2024 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

What we have audited

We have audited the accompanying financial statements 2023/2024 of KPMG N.V., Amstelveen. The financial statements comprise the consolidated financial statements of the Group and the company financial statements.

The consolidated financial statements comprise:

the consolidated statement of financial position as at 30 September 2024;
the following statements for the year ended 30 September 2024: the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows; and
the notes, comprising a summary of the significant accounting policies and other explanatory information.

The company financial statements comprise:

the company statement of financial position as at 30 September 2024;
the company statement of profit or loss for the year then ended 30 September 2024; and
the notes, comprising a summary of the accounting policies applied and other explanatory information.

The financial reporting framework applied in the preparation of the financial statements is EU-IFRS and the relevant provisions of Part 9 of Book 2 of the Dutch Civil Code for the consolidated financial statements and Part 9 of Book 2 of the Dutch Civil Code for the company financial statements.

The basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. We have further described our responsibilities under those standards in the section ‘Our responsibilities for the audit of the financial statements’ of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of KPMG N.V. in accordance with the ‘Wet toezicht accountantsorganisaties’ (Wta, Audit firms supervision act), the ‘Verordening inzake de onafhankelijkheid van accountants bij assuranceopdrachten’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore, we have complied with the ‘Verordening gedrags- en beroepsregels accountants’ (VGBA, Dutch Code of Ethics).

Our audit approach

We designed our audit procedures with respect to the key audit matters, fraud and going concern, and the matters resulting from that, in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The information in support of our opinion, such as our findings and observations related to individual key audit matters, the audit approach fraud risk and the audit approach going concern was addressed in this context, and we do not provide separate opinions or conclusions on these matters.

Overview and context

KPMG N.V. provides assurance and advisory services in the Netherlands. The Group is comprised of several group entities and therefore we considered our group audit scope and approach as set out in the section ‘The scope of our group audit’.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we considered where the board of management made important judgements, for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. In paragraph 2.3 ‘Use of estimates and judgements’ of the notes to the consolidated financial statements, the Group describes the areas of judgement in applying accounting policies and the estimation uncertainty.

Given the judgement required and the risk of management bias in the valuation of contract assets and contract liabilities, we considered this matter as a key audit matter as set out in the section ‘Key audit matters’ of this report.

KPMG N.V. assessed the possible effects of climate change and its plans to meet the net-zero commitments on its financial position, refer to the sections 'Our Impact Plan (new window)' and 'Environmental information (new window)' of the integrated report.

We discussed KPMG N.V.’s assessment and governance thereof with the board of management and evaluated the potential impact on the financial position including underlying assumptions and estimates. The expected effects of climate change are not considered a key audit matter or to impact the existing key audit matters.

We ensured that the audit team has the appropriate skills and competences that are needed for the audit of a professional services firm. The Group uses multiple IT-systems. The adequacy and effective operation of controls over these systems are an important element of the integrity of financial reporting within the Group. We utilised IT-specialists in our audit to evaluate the adequacy and effective operation of these controls considered relevant to our audit. Furthermore, we included specialists with expertise in the areas of forensics and cyber in our team.

The outline of our audit approach was as follows:

Materiality

Overall materiality: €9,048,000.

Audit scope

We conducted audit work on all group entities, being KPMG N.V., KPMG Accountants N.V., KPMG Advisory N.V., and KPMG Staffing & Facility Services B.V.

Key audit matters

Valuation of contract assets and contract liabilities.

Materiality

The scope of our audit was influenced by the application of materiality, which is further explained in the section ‘Our responsibilities for the audit of the financial statements’.

Based on our professional judgement we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and to evaluate the effect of identified misstatements, both individually and in aggregate, on the financial statements as a whole and on our opinion.

Overall group materiality	€9,048,000 (2022/2023: €7,045000). Increase in materiality compared to prior year is mainly a result of the increase of the profit before income tax.
Basis for determining materiality	We used our professional judgement to determine overall materiality. As a basis for our judgement, we used 7.5% of profit before income tax.
Rationale for benchmark applied	We used profit before income tax as the primary benchmark, a generally accepted auditing practice, based on our analysis of the common information needs of the users of the financial statements. On this basis, we believe that profit before income tax is the most relevant metric for the financial performance of the Group.
Component materiality	Based on our judgement, we used stand-alone statutory materiality for all components in our audit scope.

We also take misstatements and/or possible misstatements into account that, in our judgement, are material for qualitative reasons.

We agreed with the supervisory board that we would report to them any misstatement identified during our audit above €452,000 (2022/2023: €347,500) as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

The scope of our group audit

KPMG N.V. is the parent company of a group of entities. The financial information of this group is included in the consolidated financial statements of KPMG N.V.

We tailored the scope of our audit to ensure that we, in aggregate, performed sufficient work on the financial statements to enable us to provide an opinion on the financial statements as a whole, taking into account the management structure of the Group, the nature of operations of the group of entities, the accounting processes and controls, and the market in which the Group operates. In establishing the group audit strategy and plan, we determined the type of work required to be performed for each group entity.

We as a group audit team conducted the audit work on all the Group entities:

KPMG N.V.
KPMG Accountants N.V.
KPMG Advisory N.V.
KPMG Staffing & Facility Services B.V.

By performing the procedures outlined above, we have been able to obtain sufficient and appropriate audit evidence on the Group’s financial information, to provide a basis for our opinion on the financial statements.

Audit approach fraud risks

We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an understanding of the Group and its environment and the components of the internal control system. This included management’s risk assessment process, management’s process for responding to the risks of fraud and monitoring of the internal control system and how the supervisory board exercised oversight, as well as the outcomes. We refer to the section ‘Fraud risk assessment’ of the integrated report for the board of management’s fraud risk assessment.

We evaluated the design and relevant aspects of the internal control system with respect to the risks of material misstatements due to fraud and in particular the fraud risk assessment, as well as the global code of conduct and whistleblower procedures. We asked members of the board of management as well as the compliance officer, finance department, the legal counsel and the supervisory board whether they are aware of any actual or suspected fraud. This did not result in signals of actual or suspected fraud that may lead to a material misstatement.

As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud, misappropriation of assets and bribery and corruption. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present.

We identified the following fraud risks and performed the following specific procedures:

Identified fraud risks		Our audit work and observations
Risk of management override of controls Management is in a unique position to perpetrate fraud because of management’s ability to manipulate accounting records information and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively. That is why, in all our audits, we pay attention to the risk of management override of controls in: journal entries and other adjustments made in the preparation of the financial statements, estimates, and significant transactions, if any, outside the normal course of business for the entity. We pay particular attention to tendencies due to possible interests of management.		We evaluated the design and implementation of the internal control system in the processes of generating and processing journal entries, making estimates, and monitoring projects. We also paid specific attention to the access safeguards in the IT system and the possibility that these lead to violations of the segregation of duties. We performed our audit procedures primarily substantive based. We selected journal entries based on unexpected users and unexpected account combinations in revenue, unbilled services and advance billings positions and expenses. We conducted specific audit procedures for these entries. These procedures include, amongst others, tracing the entries to source documentation and paying attention to transactions outside the normal course of business. We also paid particular attention to consolidation and elimination entries. We performed specific audit procedures related to important estimates of management, including the provisions and the valuation of contract assets and contract liabilities. We specifically paid attention to the inherent risk of bias of management in these estimates. We refer to the key audit matter ‘valuation of contract assets and liabilities’ for more details on this estimate. We did not identify any significant transactions outside the normal course of business. Our audit procedures did not lead to specific indications of fraud or suspicions of fraud with respect to management override of controls.
The risk of fraud in revenue recognition As part of our risk assessment process and based on the assumed risk of fraud in revenue recognition, we have evaluated which type of revenue or assertion gives rise to a risk of material misstatement due to fraud. The board of management has an incentive to increase revenue to realize their goals. The board of management has a fixed remuneration. Revenue is partly based on work that is invoiced based on actual hours written times hourly rates and partly based on fixed fee projects. For the latter, the revenue is recognised in line with the project's progress, requiring an estimate of management. We concluded that the risk of fraud in revenue recognition relates to manual or unusual journal entries to increase revenues (occurrence and accuracy) and management's estimates relating to revenue recognition.		We evaluated the design and implementation of the internal controls related to the revenue process and the processes for generating and processing journal entries related to revenue. We performed our audit procedures using a combination of controls and substantive procedures. We used data analysis to identify revenue transactions that do not follow the standard business process and performed substantive testing on those transactions. This included, amongst others, postings which involve account combinations which are not consistent with our understanding of the revenue process. We refer to our key audit matter ‘valuation of contract assets and liabilities’ for audit procedures related to management estimates in revenue recognition. Our audit procedures did not lead to specific indications of fraud or suspicions of fraud with respect to the existence and occurrence of revenue.

Identified fraud risks

Our audit work and observations

Risk of management override of controls

Management is in a unique position to perpetrate fraud because of management’s ability to manipulate accounting records information and prepare fraudulent financial statements by overriding controls that otherwise appear to be operating effectively.

That is why, in all our audits, we pay attention to the risk of management override of controls in:

journal entries and other adjustments made in the preparation of the financial statements,
estimates, and
significant transactions, if any, outside the normal course of business for the entity.

We pay particular attention to tendencies due to possible interests of management.

We evaluated the design and implementation of the internal control system in the processes of generating and processing journal entries, making estimates, and monitoring projects. We also paid specific attention to the access safeguards in the IT system and the possibility that these lead to violations of the segregation of duties.

We performed our audit procedures primarily substantive based.

We selected journal entries based on unexpected users and unexpected account combinations in revenue, unbilled services and advance billings positions and expenses. We conducted specific audit procedures for these entries. These procedures include, amongst others, tracing the entries to source documentation and paying attention to transactions outside the normal course of business. We also paid particular attention to consolidation and elimination entries. We performed specific audit procedures related to important estimates of management, including the provisions and the valuation of contract assets and contract liabilities. We specifically paid attention to the inherent risk of bias of management in these estimates. We refer to the key audit matter ‘valuation of contract assets and liabilities’ for more details on this estimate.

We did not identify any significant transactions outside the normal course of business.

Our audit procedures did not lead to specific indications of fraud or suspicions of fraud with respect to management override of controls.

The risk of fraud in revenue recognition

As part of our risk assessment process and based on the assumed risk of fraud in revenue recognition, we have evaluated which type of revenue or assertion gives rise to a risk of material misstatement due to fraud.

The board of management has an incentive to increase revenue to realize their goals. The board of management has a fixed remuneration.

Revenue is partly based on work that is invoiced based on actual hours written times hourly rates and partly based on fixed fee projects. For the latter, the revenue is recognised in line with the project's progress, requiring an estimate of management.

We concluded that the risk of fraud in revenue recognition relates to manual or unusual journal entries to increase revenues (occurrence and accuracy) and management's estimates relating to revenue recognition.

We evaluated the design and implementation of the internal controls related to the revenue process and the processes for generating and processing journal entries related to revenue.

We performed our audit procedures using a combination of controls and substantive procedures.

We used data analysis to identify revenue transactions that do not follow the standard business process and performed substantive testing on those transactions. This included, amongst others, postings which involve account combinations which are not consistent with our understanding of the revenue process.

We refer to our key audit matter ‘valuation of contract assets and liabilities’ for audit procedures related to management estimates in revenue recognition.

Our audit procedures did not lead to specific indications of fraud or suspicions of fraud with respect to the existence and occurrence of revenue.

We incorporated an element of unpredictability in our audit. We reviewed lawyers’ letters and correspondence with regulators. During the audit, we remained alert to indications of fraud. Furthermore, we considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non-compliance with laws and regulations.

Audit approach going concern

The board of management prepared the financial statements on the assumption that the entity is a going concern and that it will continue all its operations for at least twelve months from the date of preparation of the financial statements.

Our procedures to evaluate board of management’s going-concern assessment included, amongst others:

considering whether the board of management identified events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern (hereafter: going-concern risks);
considering whether the board of management’s going-concern assessment included all relevant information of which we were aware as a result of our audit and inquired of the board of management regarding the board of management’s most important assumptions underlying its going-concern assessment;
evaluating the board of management’s current budget including cash flows for at least twelve months from the date of preparation of the financial statements taken into account current developments in the industry and all relevant information of which we were aware as a result of our audit;
analysing the financial position as per balance sheet date in relation to the financial position as per the prior year’s balance sheet date to assess whether events or circumstances exist that may lead to a going-concern risk, including compliance with relevant covenants;
performing inquiries of the board of management as to its knowledge of going-concern risks beyond the period of the board of management’s assessment.

Our procedures did not result in outcomes contrary to the board of management’s assumptions and judgments used in the application of the going-concern assumption.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements. We have communicated the key audit matters to the supervisory board. The key audit matters are not a comprehensive reflection of all matters identified by our audit and that we discussed. In this section, we described the key audit matters and included a summary of the audit procedures we performed on those matters.

There is one change in our key audit matters compared to prior year. The key audit matter ‘impact of the answer sharing case on the accounting and disclosures in the integrated report’ is no longer considered as a key audit matter. The sensitivity and the magnitude of the matter decreased as this case was settled, including the payment of the civil money penalty, as disclosed in the integrated report of prior year.

Key audit matter		Our audit work and observations
Valuation contract assets and contract liabilities Please refer to note 3.7 ‘contract balances’ and note 6 ‘revenue’ in the financial statements Approximately 8.7% (2023: 7.7%) of the Group’s total assets relates to contract assets (€44.8 million; 2023: €38.2 million) and 11.6% (2023: 11.9%) of the Group’s total liabilities relates to contract liabilities (€59.6 million; 2023: €59.1 million). A part of the contract, assets and liabilities have an inherent lower risk since revenue recognition is based on hours written times hourly rates. The remainder of the positions are projects in which fixed fees are agreed with KPMG’s clients. Due to the year-end of 30 September, most of the assurance engagements relate to 2024 audits that have just started and inherently have a lower risk. Based on our understanding and risk assessment, we see a higher risk of misstatement relating to fixed fee projects with for example high fees, a longer term or aged balances. Management has an incentive to increase revenue to realise their goals. The ‘over time’ revenue recognition on fixed price projects requires the Company to apply a single method of measuring progress towards complete satisfaction of the performance obligation (an input method). The input for the performance obligation is based on the actual time spent and costs incurred. Progress is measured based on the sum of the hours and costs incurred compared to the total estimated costs for the project. When it is probable that total costs will exceed total project revenue, the expected loss is recognised immediately. Revenue recognition related to fixed price projects is a key audit matter based on the quantitative materiality, the degree of complexity, judgement required and the risk of management bias for revenue recognition including valuation of contract assets and -liabilities. The board of management has also considered this area to be a key accounting estimate as disclosed in the ‘use of estimates and judgements’ note (note 2.3) to the consolidated financial statements.		We evaluated the process and the design and implementation of the internal control system related to revenues, contract assets and contract liabilities. We tested the operating effectiveness of other internal controls that were relevant for our audit such as controls testing over the opening of project codes and quarterly balance confirmations made by partners and reviewed by unit leads and the CFO. To determine the quality of the estimates we performed so-called look-back procedures, in which we assessed the outcome of prior year’s estimates in current financial year. These procedures showed us that the outcome of the projects versus the board’s estimates fell within an acceptable range. We used this to determine the rigor and depth of this year’s audit. Next to the identified risks based on our understanding, we also applied analytical procedures to identify projects with specific risks including, among others, aged positions, and high balances. Based on this analysis, we performed substantive procedures. These procedures included reconciliation to underlying documents such as contracts, invoices, approvals for additional billing, customer correspondence and where relevant bank statements. We examined documentation on the status, progress, and forecasts of projects and discussed and challenged those with engagement partners, the business control department and the board of management. We did not identify material exceptions and we obtained sufficient appropriate audit evidence with respect to management's assumptions used in valuations of contract assets and contract liabilities. After completing our fieldwork, we evaluated our procedures and the outcome for the estimates and discussed within the team whether there were indications of management bias in preparing the estimates. We found no such indications.

Key audit matter

Our audit work and observations

Valuation contract assets and contract liabilities

Please refer to note 3.7 ‘contract balances’ and note 6 ‘revenue’ in the financial statements

Approximately 8.7% (2023: 7.7%) of the Group’s total assets relates to contract assets (€44.8 million; 2023: €38.2 million) and 11.6% (2023: 11.9%) of the Group’s total liabilities relates to contract liabilities (€59.6 million; 2023: €59.1 million).

A part of the contract, assets and liabilities have an inherent lower risk since revenue recognition is based on hours written times hourly rates. The remainder of the positions are projects in which fixed fees are agreed with KPMG’s clients. Due to the year-end of 30 September, most of the assurance engagements relate to 2024 audits that have just started and inherently have a lower risk.

Based on our understanding and risk assessment, we see a higher risk of misstatement relating to fixed fee projects with for example high fees, a longer term or aged balances.

Management has an incentive to increase revenue to realise their goals.

The ‘over time’ revenue recognition on fixed price projects requires the Company to apply a single method of measuring progress towards complete satisfaction of the performance obligation (an input method). The input for the performance obligation is based on the actual time spent and costs incurred. Progress is measured based on the sum of the hours and costs incurred compared to the total estimated costs for the project. When it is probable that total costs will exceed total project revenue, the expected loss is recognised immediately.

Revenue recognition related to fixed price projects is a key audit matter based on the quantitative materiality, the degree of complexity, judgement required and the risk of management bias for revenue recognition including valuation of contract assets and -liabilities.

The board of management has also considered this area to be a key accounting estimate as disclosed in the ‘use of estimates and judgements’ note (note 2.3) to the consolidated financial statements.

We evaluated the process and the design and implementation of the internal control system related to revenues, contract assets and contract liabilities.

We tested the operating effectiveness of other internal controls that were relevant for our audit such as controls testing over the opening of project codes and quarterly balance confirmations made by partners and reviewed by unit leads and the CFO.

To determine the quality of the estimates we performed so-called look-back procedures, in which we assessed the outcome of prior year’s estimates in current financial year.

These procedures showed us that the outcome of the projects versus the board’s estimates fell within an acceptable range. We used this to determine the rigor and depth of this year’s audit.

Next to the identified risks based on our understanding, we also applied analytical procedures to identify projects with specific risks including, among others, aged positions, and high balances. Based on this analysis, we performed substantive procedures. These procedures included reconciliation to underlying documents such as contracts, invoices, approvals for additional billing, customer correspondence and where relevant bank statements. We examined documentation on the status, progress, and forecasts of projects and discussed and challenged those with engagement partners, the business control department and the board of management.

We did not identify material exceptions and we obtained sufficient appropriate audit evidence with respect to management's assumptions used in valuations of contract assets and contract liabilities.

After completing our fieldwork, we evaluated our procedures and the outcome for the estimates and discussed within the team whether there were indications of management bias in preparing the estimates. We found no such indications.

Report on the other information included in the annual report

The integrated report contains other information. This includes all information in the annual report in addition to the financial statements and our auditor’s report thereon.

Based on the procedures performed as set out below, we conclude that the other information:

is consistent with the financial statements and does not contain material misstatements; and
contains all the information regarding the management report and the other information that is required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and the understanding obtained in our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing our procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of such procedures was substantially less than the scope of those procedures performed in our audit of the financial statements.

Management is responsible for the preparation of the other information, including the management report and the other information in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Report on other legal and regulatory requirements

Our appointment

We were appointed as auditors of KPMG N.V. on 14 June 2022 by the supervisory board. This was followed by the passing of a resolution by the meeting of shareholders held on 24 June 2022. Our appointment now represents a total period of uninterrupted engagement of two years.

Responsibilities for the financial statements and the audit

Responsibilities of the board of management and the supervisory board for the financial statements

The board of management is responsible for:

the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code; and for
such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the board of management is responsible for assessing the Company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, the board of management should prepare the financial statements using the going-concern basis of accounting unless the board of management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so. The board of management should disclose in the financial statements any event and circumstances that may cast significant doubt on the Company’s ability to continue as a going concern.

The supervisory board is responsible for overseeing the Company’s financial reporting process.

Our responsibilities for the audit of the financial statements

Our responsibility is to plan and perform an audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence to provide a basis for our opinion. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high but not absolute level of assurance, and is not a guarantee that an audit conducted in accordance with the Dutch Standards on Auditing will always detect a material misstatement when it exists. Misstatements may arise due to fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

Materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

A more detailed description of our responsibilities is set out in the appendix to our report.

Amsterdam, 6 December 2024
PricewaterhouseCoopers Accountants N.V.

Original has been signed by M.C. Bond RA

Appendix to our auditor’s report on the financial statements 2023/2024 of KPMG N.V.

In addition to what is included in our auditor’s report, we have further set out in this appendix our responsibilities for the audit of the financial statements and explained what an audit involves.

The auditor’s responsibilities for the audit of the financial statements

We have exercised professional judgement and have maintained professional scepticism throughout the audit in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit consisted, among other things of the following:

Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the intentional override of internal control.
Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Concluding on the appropriateness of management’s use of the going-concern basis of accounting, and based on the audit evidence obtained, concluding whether a material uncertainty exists related to events and/or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report and are made in the context of our opinion on the financial statements as a whole. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluating the overall presentation, structure and content of the financial statements, including the disclosures, and evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Considering our ultimate responsibility for the opinion on the financial statements, we are responsible for the direction, supervision and performance of the group audit. In this context, we have determined the nature and extent of the audit procedures for components of the Group to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole. Determining factors are the geographic structure of the Group, the significance and/or risk profile of group entities or activities, the accounting processes and controls, and the industry in which the Group operates. On this basis, we selected group entities for which an audit or review of financial information or specific balances was considered necessary.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

From the matters communicated with the supervisory board, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.