Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 412 report information sustainability report Governance review review statements Annual Report 2022 KPMG LLP’s independent auditor’s report to the members of Barclays PLC (continued) Our materiality of £275m (2021: £230m) Audit misstatement posting threshold 6. Our determination of was determined by applying a percentage 2022: £13m 2021: £11m materiality to Profit Before Tax. When using a profit- What we mean The scope of our audit was influenced by related measure to determine overall our application of materiality. We set This is the amount below which identified materiality, KPMG’s approach is to apply a quantitative thresholds and overlay misstatements are considered to be percentage between 3% and 5% to the qualitative considerations to help us clearly trivial from a quantitative point of pre-tax measure. In setting overall determine the scope of our audit and the view. We may become aware of materiality, we applied a rate of 3.9% nature, timing and extent of our differences below this threshold which (2021: 3.8%) which is lower than the top procedures, and in evaluating the effect of could alter the nature, timing and scope of end of the allowable percentage range. misstatements, both individually and in the our audit procedures, for example if we Materiality for the Parent Company aggregate, on the financial statements as a identify smaller differences which are financial statements was set at £260m whole. indicators of fraud. (2021: £225m), determined with reference Materiality for the financial statements This is also the amount above which all to a benchmark of Parent Company net as a whole differences identified are communicated assets (of which it represents 0.5% (2021: 2022: £275m 2021: £230m to Barclays PLC’s Board Audit Committee. 0.4%)). What we mean Basis for determining the audit Performance materiality misstatement reporting threshold and A quantitative reference for the purpose of 2022: £179m 2021: £170m judgements applied planning and performing our audit What we mean The audit misstatement posting threshold Basis for determining materiality and has been set at a level of 5% (2021:5%) of Our procedures on individual account judgements applied materiality for Barclays PLC’s Group balances and disclosures were performed We have determined overall materiality for financial statements. We consider this to a lower threshold, performance the Barclays PLC Group to be £275m appropriate based on the number and materiality, so as to reduce, to an (FY21: £230m). nature of adjusted and unadjusted audit acceptable level, the risk that individually A key judgement in determining materiality differences (certain of which were immaterial misstatements in individual (and performance materiality) is the judgemental) identified during previous account balances add up to a material appropriate benchmark to select, based on audits. amount across the financial statements as our perception of the needs of a whole. We also report to the Audit Committee shareholders. We considered which any other identified misstatements that Basis for determining performance benchmarks and key performance warrant reporting on qualitative grounds. materiality and judgements applied indicators have the greatest bearing on We have considered performance shareholder decisions. materiality at a level of 65% (2021: 74%) of We determined that profit before tax materiality for Barclays PLC Group’s remains the key benchmark for the financial statements as a whole to be Barclays PLC Group. For FY21 we appropriate. We applied this percentage in normalised profit before tax downward by our determination of performance £2.3bn to adjust for the fact that ECL materiality based on the level of control charges were considered abnormally low deficiencies during the prior period. as the economy recovered from the The Group performance materiality was COVID-19 pandemic. For FY22 we did not set at £179m (2021: £170m) and £169m normalise profit before tax. This is (2021: £169m) for the parent company. reflective of the impact of COVID-19 on ECL being less pronounced in the current period. We determined that no adjustments to profit before tax were required for FY22. This change is a driver of the increase in materiality in 2022. The overall materiality for the Group of £275m (2021: £230m) compares as follows to the other main financial statement elements amounts in the table below. Total Revenue Total Assets Net Assets 2022 2021 2022 2021 2022 2021 £21,940m £1,384,285m £69,260m £70,041m £24,956m £1,513,699m 1.05% 0.02% 0.40% 0.33% Group Materiality as % of caption 1.10% 0.02%