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statements and the interest receivables from Roche Group Companies as disclosed in note
8 of the financial statements. We have also used data analysis to identify and address
high-risk journal entries.
We have rebutted the presumed fraud risk on revenue recognition, due to the simplicity of
the process and the high predictability, as well as the absence of incentives by the Board
of Directors.
We incorporated elements of unpredictability in our audit. We also considered the outcome
of our other audit procedures and evaluated whether any findings were indicative of fraud or
non-compliance.
We considered available information and made enquiries of the Board of Directors.
The above mentioned approach did not lead to indications for potential risks of material
misstatements due to fraud.
Our key audit matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the financial statements. We have communicated the key audit
matters to the Board of Directors. The key audit matters are not a comprehensive reflection
of all matters discussed.
This matter was addressed in the context of our audit of the financial statements as a whole
and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
VALUATION OF LOANS ISSUED
We consider the valuation of the loans,
issued to Roche Group Companies as
disclosed in note 7 of the financial
statements and the interest receivables from
Roche Group Companies as disclosed in
note 8 of the financial statements, combined
representing 99.4% of the balance sheet
total, a key audit matter. We identified this
as a key audit matter due to the size of the
loans issued and due to the material impact
a possible impairment may have on the
income statement.
Initially, loans issued to and the interest
receivables from Roche Group Companies are
recognized at its fair value and subsequently
carried at amortized cost using the effective
interest method. The Board of Directors
recognized the expected credit loss provision
with regard to the loans issued to Roche
Deutschland Holding GmbH and Roche
Diagnostics Limited in accordance with IFRS
9.
We have performed detailed audit
procedures addressing the valuation,
including possible impairment triggers, of
the loans issued to and an interest
receivables with Roche Deutschland Holding
GmbH and Roche Diagnostics Ltd.
We have performed the following audit
procedures:
Inspected the financial statements as
per 31 December 2020 of counterparties
Roche Deutschland Holding GmbH and
Roche Diagnostics Limited.
Inspected the loan agreements entered
into between the company and Roche
Deutschland Holding GmbH and Roche
Diagnostics Limited.
Inspected the agreement with the
guarantor Roche Holding Ltd.
Inspected the 2021 interim financial
statements of the guarantor Roche
Holding Ltd and financial statements as
per 31 December 2020 of Roche Holding
Ltd.