Other information
continued
Our audit approach
Overview
Business review
Governance
Financials
Investors
The outlines of our audit approach were as follows:
Overview and context
Koninklijke Ahold Delhaize N.V. is an international food retail group. The Group comprises of several components and therefore we considered our
group audit scope and approach as set out in ‘The scope of our group audit’ section. We paid specific attention to the areas of focus driven by the
operations of the Company as set out below.
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we
assessed the areas where the Management Board made subjective judgements, for example in respect of significant accounting estimates that
involved making assumptions and considering future events that are inherently uncertain (see Note 2 to the financial statements). Our audit and
the determination of key audit matters was shaped by the Company’s retail business activities, which were expanded as a result of the merger with
Delhaize. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether there was
evidence of bias by the Management Board that may represent a risk of material misstatement due to fraud.
We ensured that the audit teams both at group and at component levels included the appropriate skills and competencies which are needed for
the audit of a retail company. The Group’s operations utilize a range of legacy IT systems. The adequacy and effective operation of controls over
these systems is an important element of the integrity of financial reporting within the Group. We utilized IT specialists in our audit to evaluate the
adequacy and effective operation of these controls. Furthermore, we included specialists in areas requiring valuation, tax and actuarial (including
pension accounting) expertise.
Key audit
matters
Audit scope
We conducted audit work at 11 components.
Each component is audited by local engagement teams that are based in the USA, the Netherlands, Belgium,
Greece, Switzerland, the Czech Republic and Curacao.
Site visits were conducted in five countries: USA, Netherlands, Belgium, Greece and Switzerland.
Our audit coverage is 91% of consolidated net sales, 84% of total assets and 85% of income before income taxes.
Key audit matters
Accounting for the Ahold Delhaize merger
Recognition of vendor allowances
Impairment testing of store assets
Employee benefit plan measurement
Materiality
Overall materiality: €66 million which represents 5% of adjusted income before income taxes.
Ahold Delhaize Annual Report 2016 ^30
Materiality
