b'78 Mercia Asset Management PLC Annual Report and Accounts 2021Independent auditors report to the membersof Mercia Asset Management PLC continuedComponent materialityThe audit of the Group and significant components were executed at levels of materiality applicable to each individual entity, which were lower than Group materiality and ranged from 34,000 to 3,800,000. In the audit of each component, we further applied performance materiality levels of 70% of the component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.Reporting thresholdWe agreed with the Audit Committee that we would report to them all individual audit differences in excess of 187,500. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.Other informationThe Directors are responsible for the other information. The other information comprises the information included in the annual report and accounts other than the financial statements and our auditors report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.We have nothing to report in this regard.Other Companies Act 2006 reportingBased on the responsibilities described below and our work performed during the course of the audit, we are required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.strategic reportIn our opinion, based on the work undertaken in the course of the audit:and directorsthe information given in the Strategic report and the Directors report for the financial year for which the reportfinancial statements are prepared is consistent with the financial statements; andthe Strategic report and the Directors report have been prepared in accordance with applicable legal requirements.In the light of the knowledge and understanding of the Group and Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the Directors report.Matters onWe have nothing to report in respect of the following matters in relation to which the Companies Act 2006 which we arerequires us to report to you if, in our opinion:required toadequate accounting records have not been kept by the Parent Company, or returns adequate for our audit report byhave not been received from branches not visited by us; orexception the Parent Company financial statements are not in agreement with the accounting records and returns; orcertain disclosures of Directors remuneration specified by law are not made; orwe have not received all the information and explanations we require for our audit.Responsibilities of DirectorsAs explained more fully in the statement of Directors responsibilities, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.In preparing the financial statements, the Directors are responsible for assessing the Groups and the Parent Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.Auditors responsibilities for the audit of the financial statementsOur 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 auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 these financial statements.'