Aviva plc: Adoption of Aviva Market Consistent Embedded Value (MCEV) methodology and impact on results
Independent auditors' report to the directors of Aviva plc on the consolidated Market Consistent Embedded Value financial statements for the year ended 31 December 2007
We have audited the consolidated Aviva MCEV financial statements of the Group for the year ended 31 December 2007 which comprises the Summarised Consolidated Income Statement, the Consolidated Statement of Recognised Income and Expense, and the Group MCEV Analysis of Earnings for the year ended 31 December 2007; the Reconciliation of Movements in Consolidated Shareholders’ Equity, the Summarised Consolidated Balance Sheet, the Reconciliation between Shareholders’ equity on an IFRS basis and an MCEV basis and the Segmentation of summarised consolidated balance sheet as at 31 December 2007 together with the related notes; and the sections on adoption of Aviva market consistent embedded value methodology and impact on results and the statistical supplement. The consolidated Aviva MCEV financial statements have been prepared in accordance with the basis of preparation.
We have reported separately on the statutory Group financial statements of Aviva plc for the year ended 31 December 2006 and the year ended 31 December 2007. The information contained in the consolidated Aviva MCEV financial statements should be read in conjunction with the financial statements prepared on an IFRS basis. This information is described within the consolidated Aviva MCEV financial statements as having being audited.
This report is made solely to the Company in accordance with our engagement letter dated 23 January 2008. Our audit work has been undertaken so that we might state to the Company those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility or liability to anyone other than the Company for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the consolidated Aviva MCEV financial statements under the basis of preparation. View the Statement of Directors' responsibilities in respect of the Market Consistent Embedded Value (MCEV) basis.
Our responsibilities, as independent auditors, in relation to the consolidated Aviva MCEV financial statements are set out in our engagement letter dated 23 January 2008. We report to you our opinion as to whether the consolidated Aviva MCEV financial statements have been properly prepared in all material respects in accordance with the basis of preparation. We also report to you if we have not received all the information and explanations we require for our audit of the consolidated Aviva MCEV financial statements.
We read other information contained in the Aviva MCEV announcement and consider whether it is consistent with the consolidated Aviva MCEV financial statements.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the consolidated Aviva MCEV financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of the consolidated Aviva MCEV financial statements, and of whether the accounting policies are appropriate to the group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the consolidated Aviva MCEV financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of the consolidated Aviva MCEV financial statements.
Opinion
In our opinion the consolidated Aviva MCEV financial statements. for the year ended 31 December 2007 have been properly prepared, in all material respects, in accordance with the basis of preparation.
Ernst & Young LLP
London
Date: 3 February 2009
