Independent Auditors Report (continued)
Revenues PBT Assets
O O Qs
Introduction Report of the Executive Board Report of the Supervisory Board
We have performed audit procedures ourselves at corporate entities and the operations in the
Netherlands. Furthermore, we performed audit procedures at group level on areas such as consolidation,
disclosures, goodwill, intangible assets, joint ventures, financial instruments, acquisitions and divestments.
Specialists were involved amongst others in the areas of treasury, information technology, tax, accounting,
pensions and valuation. For selected component audit teams, the group audit team provided detailed
written instructions, which, in addition to communicating the requirements of component audit teams,
detailed significant audit areas and information obtained centrally relevant to the audit of individual
components including awareness for risk related to management override of controls. Furthermore, we
developed a plan for overseeing each component audit team based on its relative significance to the
Company and certain other risk characteristics. This included procedures such as visiting components
(the Netherlands, Mexico, Brazil, United Kingdom, France, Nigeria, Vietnam, Poland, Italy, Greece, Portugal,
HUSA, Lagunitas, New Zealand and South Africa) during the year, performing file reviews, holding
conference calls, attending meetings and reviewing component audit team deliverables to gain sufficient
understanding of the work performed. For smaller components we have performed review procedures or
specific audit procedures.
By performing the procedures mentioned above at group entities, together with additional procedures
at group level, we have been able to obtain sufficient and appropriate audit evidence about the group's
financial information to provide an opinion on the consolidated financial statements.
18%
22%
Full scope auditor coverage
Other coverage
Heineken N.V. Annual Report 2019
Financial Statements
Sustainability Review
Other Information
Scope of fraud and non-compliance with laws and regulations
In accordance with Dutch Standards on Auditing, we are responsible for obtaining reasonable assurance
that the financial statements taken as a whole are free from material misstatements, whether due to fraud
or error.
Inherent to our responsibilities for the audit of the financial statements, there is an unavoidable risk that
material misstatements go undetected, even though the audit is planned and performed in accordance
with Dutch law. The risk of undetected material misstatements due to fraud is even higher, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Also, we are not responsible for the prevention and detection of fraud and non-compliance with all laws
and regulations. Our audit procedures differ from a forensic or legal investigation, which often have a more
in-depth character.
In identifying potential risks of material misstatement due to fraud and non-compliance with laws and
regulations we evaluated the Company's risk assessment, had inquiries with management, those charged
with governance and others within the group including but not limited to, in-house legal teams, compliance
officers, internal audit and financial reporting teams. We further involved a forensic specialist, evaluated
integrity committee reports (which include the Company's speak up reports) and material litigation reports.
Following these procedures, and the presumed risks under the prevailing audit standards, we considered
fraud risks related to management override of controls (presumed), and related to the valuation of accrued
liabilities for promotional allowances and rebates. Our audit procedures to respond to these fraud risks
included, amongst others, an evaluation of relevant internal controls and supplementary substantive audit
procedures, including detailed testing of journal entries. Data analytics, including analyses for high risk
journals, are part of our audit approach to address fraud risks, which could have a material impact on the
financial statements. Our response in addressing fraud risks related to promotion allowances and rebates,
and the potential bias in significant estimates has been detailed in our key audit matters.
Resulting from our risk assessment procedures, and whilst considering that effects from non-compliance
could considerably vary, we considered adherence to (corporate) tax law and financial reporting with a direct
effect on the financial statements as an integrated part of our audit procedures to the extent material for
the related financial statements. Apart from these, the Company is subject to other laws and regulations
where the consequences of non-compliance could have a material effect on amounts and/or disclosures in
the financial statements, for instance through imposing fines or litigation. Examples of such other laws and
regulations are those relating to anti-bribery and corruption, competition and data privacy laws, and human
rights. As required by auditing standards, we performed audit procedures to identify non-compliance with
these laws and regulations through inquiries with management, those charged with governance and others
within the group and inspection of relevant correspondence with regulatory authorities. We also inspected
lawyers' letters and remained alert to indications of (suspected) non-compliance throughout the audit, held
inquiries with group legal counsel and internal audit, and obtained a written representation that all known
instances of (suspected) non-compliance with laws and regulations were disclosed to us.