TRANSPARENCY REPORT 2016 - QUALITY, ETHICS AND EXCELLENCE - Grant Thornton Morocco
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GRANT THORNTON UK LLP TRANSPARENCY REPORT 2016 QUALITY, ETHICS AND EXCELLENCE
Grant Thornton UK LLP Transparency Report 2016 2
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GRANT THORNTON
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RESULT OF AUDIT OF ANNUAL
AND CONSOLIDATED FINANCIAL
STATEMENTS
RESULT OF AUDIT OF ANNUAL
AND CONSOLIDATED FINANCIAL
RESULT OF AUDIT OF ANNUAL
MORE THAN
STATEMENTS
AND CONSOLIDATED FINANCIAL
STATEMENTS
MORE THAN
42,000
MORE THAN
42,000
42,000
MORE THAN 42,000 GRANT THORNTON
PEOPLE
MORE THANWORLDWIDE
42,000 GRANT THORNTON
PEOPLE WORLDWIDE
MORE THAN 42,000 GRANT THORNTON
ONEOF
ONE OFTOPTOP 5050
PEOPLE WORLDWIDE
WORLD’S MOST ATTRACTIVE
ONEMOST
WORLD’S
GLOBAL OF TOP 50
ATTRACTIVE
EMPLOYERS
GLOBAL
WORLD’SEMPLOYERS
MOST ATTRACTIVE
AWARDED BY UNIVERSUM ANNUAL
GLOBAL
AWARDED
STUDENT EMPLOYERS
BY UNIVERSUM
SURVEY
ANNUAL
IN 2015
STUDENT SURVEY IN 2015
AWARDED BY UNIVERSUM ANNUAL
STUDENT SURVEY IN 2015
GRANT THORNTON UK LLP EMPLOYMENT STATISTICS
85%
85% 94% 85% 83%
85% 94%
94% 85% 83%
83%
OF OUROFPEOPLE
OUR PEOPLE ARE PROUD
ARE PROUD OF OUR
OF OUR PEOPLE
PEOPLE AREARE ENCOURAGEDTO
ENCOURAGED TO OFOFOUR
OUR PEOPLE
PEOPLE FEEL
FEELTHAT
THATOUR
OUR OFOF
OUR PEOPLE
OUR PEOPLEFEEL THEIR
FEEL TEAM
THEIR TEAM
TO BE OF
PART OFFIRM
THE FIRM DELIVER HIGH QUALITY WORK STRUCTURE IS FOSTER THETHE
CULTURE OF QUALITY
TO BE PART THE DELIVER HIGH QUALITY WORK STRUCTURE IS SET
SETUPUPININTHE
THERIGHT
RIGHT FOSTER CULTURE OF QUALITY
AND MORE
OF OUR THAN
PEOPLE 8 OUT OF 10 WAY TO TAKE RESPONSIBILITY ANDOF
EXCELLENCE
AND MORE THAN 8 OUTARE PROUD
OF 10 OF OUR PEOPLE ARE ENCOURAGED TO WAYOF OUR
TO PEOPLE
TAKE FEEL THAT OUR
RESPONSIBILITY AND OUR PEOPLE FEEL THEIR TEAM
EXCELLENCE
WOULD RECOMMEND OUR SERVICE FOR OUR ACTIONS
WOULD TO BE PART OF OUR
RECOMMEND THE FIRM
SERVICE DELIVER HIGH QUALITY WORK FORSTRUCTURE
OUR ACTIONSIS SET UP IN THE RIGHT FOSTER THE CULTURE OF QUALITY
AND MORE THAN 8 OUT OF 10 WAY TO TAKE RESPONSIBILITY AND EXCELLENCE
WOULD RECOMMEND OUR SERVICE FOR OUR ACTIONS
1,602,000
1,602,000
1,602,000
HOURS INVESTED IN DELIVERING
AUDITS VERSUS 1,528,000 HOURSGrant Thornton UK LLP Transparency Report 2016 3 DISCLOSURES MAPPING This transparency report sets out how the firm complies with the disclosure requirements of the Audit Firm Governance Code, being the benchmark for good governance, and also the steps we have taken to drive audit quality by reference to the Audit Quality Framework. As a UK statutory auditor of public interest entities, we welcome the opportunity to share the information included in this transparency report which covers the year ended 30 June 2016. The table below maps the requirements of the disclosures relating to the Audit Firm Governance Code to our Transparency Report. We acknowledge the provisions of the current code and are working towards adopting the provisions of the updated Audit Firm Governance Code for next year’s report. AUDIT FIRM GOVERNANCE CODE REF NARRATIVE PAGE A.1.2 THE FIRM SHOULD STATE IN ITS TRANSPARENCY REPORT HOW ITS GOVERNANCE STRUCTURES AND MANAGEMENT 16 - 19 TEAM OPERATE, THEIR DUTIES AND THE TYPES OF DECISIONS THEY TAKE. A.1.3 THE FIRM SHOULD STATE IN ITS TRANSPARENCY REPORT THE NAMES AND JOB TITLES OF ALL MEMBERS OF THE FIRM’S 16 - 19, GOVERNANCE STRUCTURES AND ITS MANAGEMENT TEAM, HOW THEY ARE ELECTED OR APPOINTED AND THEIR TERMS, 46 - 47 LENGTH OF SERVICE, MEETING ATTENDANCE IN THE YEAR, AND RELEVANT BIOGRAPHICAL DETAILS. C.2.1 THE FIRM SHOULD STATE IN ITS TRANSPARENCY REPORT ITS CRITERIA FOR ASSESSING THE IMPACT OF INDEPENDENT 18 NON-EXECUTIVES ON THE FIRM’S INDEPENDENCE AS AUDITORS AND THEIR INDEPENDENCE FROM THE FIRM AND ITS OWNERS. D.1.3 THE FIRM SHOULD STATE IN ITS TRANSPARENCY REPORT HOW IT APPLIES POLICIES AND PROCEDURES FOR MANAGING 31 POTENTIAL AND ACTUAL CONFLICTS OF INTEREST. D.2.2 THE FIRM SHOULD STATE IN ITS TRANSPARENCY REPORT THAT IT HAS PERFORMED A REVIEW OF THE EFFECTIVENESS 34 OF THE SYSTEM OF INTERNAL CONTROL, SUMMARISE THE PROCESS IT HAS APPLIED AND CONFIRM THAT NECESSARY ACTIONS HAVE BEEN OR ARE BEING TAKEN TO REMEDY ANY SIGNIFICANT FAILINGS OR WEAKNESSES IDENTIFIED FROM THAT REVIEW. IT SHOULD ALSO DISCLOSE THE PROCESS IT HAS APPLIED TO DEAL WITH MATERIAL INTERNAL CONTROL ASPECTS OF ANY SIGNIFICANT PROBLEMS DISCLOSED IN ITS FINANCIAL STATEMENTS OR MANAGEMENT COMMENTARY. D.2.3 IN MAINTAINING A SOUND SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT AND IN REVIEWING ITS EFFECTIVENESS, 34 THE FIRM SHOULD USE A RECOGNISED FRAMEWORK SUCH AS THE TURNBULL GUIDANCE AND DISCLOSE IN ITS TRANSPARENCY REPORT THE FRAMEWORK IT HAS USED. This Transparency report was approved by the Strategic Leadership Team of Grant Thornton UK LLP on 30 September 2016 and signed on its behalf by Sacha Romanovitch.
Grant Thornton UK LLP Transparency Report 2016 4
CONTENTS
1. EVERYTHING WE DO STARTS AND ENDS WITH US Pg5 8. QUALITY AND INTERNAL CONTROL Pg23
2. REPORT FROM THE INDEPENDENT Pg6 9. ETHICS AND INDEPENDENCE Pg29
CHAIR OF THE PARTNERSHIP OVERSIGHT BOARD
10. STATEMENT ON THE FIRM’S Pg34
3. FOREWORD FROM THE HEAD Pg8 INTERNAL QUALITY CONTROL SYSTEMS
OF QUALITY, ETHICS AND EXCELLENCE
11. EXTERNAL QUALITY ASSURANCE Pg35
4. MESSAGE FROM THE HEAD Pg10
OF AUDIT AND ASSURANCE 12. FINANCIAL INFORMATION Pg39
5. LEGAL STRUCTURE, OWNERSHIP Pg12 13. PARTNER REMUNERATION Pg41
AND THE INTERNATIONAL ORGANISATION 14. LIST OF PUBLIC INTEREST ENTITIES Pg42
6. LEADERSHIP AND GOVERNANCE Pg16 15. POB MEMBERS AS AT 30 JUNE 2016 Pg45
7. REPORT FROM THE CHAIRMAN OF Pg20
THE RISK & AUDIT COMMITTEEGrant Thornton UK LLP Transparency Report 2016 5
1.
EVERYTHING WE DO
STARTS AND ENDS
WITH US…
…our collective energy, commitment and intelligence. We’re a firm with a unique culture
and brand who do things differently, yet what really distinguishes Grant Thornton is our people.
We personally understand that delivering high quality service is critical to our future success.
I believe in all of our people, trusting each and every one to live our values, make choices and do
what is the right thing by our firm. After all, as a shared enterprise, it’s in all of our best interests
to share ideas and share responsibility in order to share the reward.
This Transparency Report records global trust index, last year saw public Along with the ever-changing needs
the progress we have made in 2016 trust in business hit a five-year low. of our clients, our markets and wider
within our Quality, Ethics and Excellence While this year it seems to have improved society, we have a responsibility to
agenda and sets out how we comply moderately, the trust gap between the exercise professionalism and good
with the requirements of the Audit Firm informed public and wider population is judgement every day.
Governance Code, as well as the steps growing, driven in part by income
In 2016, audit and assurance
we have taken to drive audit quality by inequality and divergent expectations for
services accounted for 28% of the
reference to the Audit Quality Framework. the future. This is why playing our part in
firms’ revenues and remain a key area
92% of the assurance team feel helping to create trust and integrity in
for our firm. We currently provide
encouraged to deliver high quality audits. markets is so important.
audit services to approximately 8,500
We believe this report demonstrates that
Sharing responsibility is about making companies, including 190 listed entities.
Grant Thornton has the capabilities to
a commitment to each other and
conduct high quality audits objectively
understanding the consequences
and effectively and to provide high
of falling short on this. Our new Code
quality services to its clients.
of Conduct forms a large part of that
Our purpose is about shaping a vibrant commitment, providing clarity on what’s
economy where business and people expected of us as Grant Thornton people SACHA ROMANOVITCH
can thrive. This translates into who we and as a firm. While it can’t govern every CHIEF EXECUTIVE OFFICER,
work with, what we do with them, what possible situation – it’s a key part of our GRANT THORNTON UK LLP
we speak out on and how we are as wider stewardship, governance and risk
a business. It is clear that audit and management culture – and has evolved
assurance is fundamental to trust and to reflect our newly defined purpose –
integrity in markets – and this is why to shape a vibrant economy.
we do this work. According to Edelman’sGrant Thornton UK LLP Transparency Report 2016 6
2.
REPORT FROM THE
INDEPENDENT CHAIR
OF THE PARTNERSHIP
OVERSIGHT BOARD
This is my first report as Independent Non-Executive Chair of Grant Thornton UK LLP’s
Partnership Oversight Board (POB). I was appointed in April this year and am the first ‘outside’
Chair of the POB – although having been a Non-Executive member of the Board for five years,
Grant Thornton is an organisation I already know well and have enormous affection and respect
for. It is a firm with bold ideas and great ambition, and I’m pleased here to be able to give our
wider stakeholders an insight into the role of our Non-Executives in the way it is governed.
Our three Independent Non-Executives All three of us make up the Profit We meet regularly as members of
(INEs) are central to the oversight of Sharing sub-committee, alongside the Partnership Oversight Board, the
Grant Thornton’s leadership team, one of the partners who is an elected body which holds the firm’s executive
performing a role that has many parallels member of the Board. Together these leadership to account, and also separately
in the governance of public companies, committees undertake much of the with members of the leadership team to
albeit with a particular eye to the specific heavy lifting of the governance work address current issues. Business leaders
requirements of a professional services of the Board, ensuring that the firm’s and partners regularly attend informal
partnership that is owned entirely by its controls are effective, its approach to meetings with the Independent Non-
working partners. Our role involves a risk management is suitably balanced, Executives and the elected members of
mixture of looking after the interests of its leadership is properly assessed and the Board. This, together with the firm’s
the partners and other stakeholders in the rewarded, and the financial interests inclusive spirit, has created a strong
business, being a mentor for and providing of the partners are fairly determined. system through which the Non-Executives
constructive challenge to the CEO, her gain access to all relevant information
As Non-Executives, we have a
Strategic Leadership Team and executive necessary to pursue our public interest
particular responsibility to ensure
management, and ensuring good role under the Audit Firm Governance
that Grant Thornton’s public interest
corporate governance of the firm’s Code, as well as ensuring the interests
audits are of the requisite quality,
business and of its people. In bringing of all stakeholders in the firm are taken
as assessed by the regulator, but
independent oversight, we try to into account in executive decision making.
more widely by our stakeholders in
provide a different viewpoint both
the marketplace. In discharging this Audit Quality Reviews and the firm’s
inside and outside the boardroom.
responsibility we participate in various wider quality agenda have continued
Two of our INEs are members of the internal and external reviews and policy to be our principal focus over the last
Risk and Assurance sub-committee of consultations. As part of the annual twelve months. The scores achieved
the Board – one of whom will take over profit-sharing process, we ensure that by Grant Thornton in the AQRT process
as Chair of the sub-committee this the quality grades of all audit partners this year, and public sector audit
financial year – while I am Chair of are appropriately taken into account reports, have improved.
our Remuneration Committee. in determining their profit shares.Grant Thornton UK LLP Transparency Report 2016 7
However, there remains more work to is vital to its future reputation and in and it was decided that its next member
be done and we will continue to closely turn its success. should have the audit experience
monitor this. Internal regular meetings necessary to understand in detail the
We have regularly reviewed the
are held with the Head of Audit and firm’s audit business as well as having
leadership team’s implementation
Assurance to ensure that good practices experience of publicly listed company
of the firm’s new shared enterprise
are embedded and remain on track for finance. Deena Mattar was duly appointed.
programme. The introduction of this
the delivery of high quality audits by the She is a qualified accountant, has been
programme is central to the executive’s
firm and that internal controls in this area finance director of a listed entity, and
long term strategy. A key principle has
are effective. she now has extensive experience
been to consult with all levels of the firm
as a non-executive.
We also continue to monitor and review so as to ensure the programme satisfies
the quality of the non-audit practices of the aspirations and expectations of Looking forward to the current year,
the firm, and in this regard client take-on all interested parties. we anticipate a few further role changes
and continuance procedures have within our oversight team. We will continue
After the CEO and Strategic Leadership
been examined. There remain lessons to support the partnership closely, raising
Team changes which took effect at the
to be learned in client selection and areas of concern, looking at issues
beginning of the financial year, we oversaw
improvements to be made in this area. that are likely to cause an impact on
the handover and transition to a new team
the business and in turn affect objectives,
We have reviewed the firm’s process with a refreshed strategy. Subsequent
remuneration and allocation of profits.
of partner grading and the awarding to the executive team changes, the final
We will continue to focus on the quality
of incentives to ensure alignment with term of the Board’s Chairman, Steve
and ethics agenda not only in the context
the firm’s quality agenda, looking at Maslin, came to an end and a succession
of the audit practice but also across
technical skills and ability, sector plan and selection process was carried
the other practices of the firm.
knowledge, commercial judgement out for the role of POB Chair. I was
and compliance with the firm’s values appointed as Chairman following the
and culture. conclusion of this process and I am the
ED WARNER
first Independent Chairman of the POB. CHAIRMAN OF PARTNERSHIP
The new Ethical Standard introduced
OVERSIGHT BOARD
this year has created an opportunity to One of our first non-executives, Richard GRANT THORNTON UK LLP
review the policies and processes of the Eyre, stood down after five years’ service
firm’s quality and ethics function, bringing during this financial year. The firm
the quality and ethics agenda across the conducted a selection process for a new
firm’s practices together. Conducting Non-Executive, during which the balance
business in an ethical way, being clear of independence and skills amongst the
about who the firm works with and why, Independent team was widely discussed
“We will continue to focus on the quality
and ethics agenda not only in the context
of the audit practice, but also across
the other practices of the firm.”Grant Thornton UK LLP Transparency Report 2016 8
3.
FOREWORD FROM
THE HEAD OF QUALITY,
ETHICS AND EXCELLENCE
Although I have only been in post a short while, I am already in a position to make some
preliminary observations in my newly created role of Head Quality, Ethics and Excellence.
Firstly, I am really buoyed by the For our people, this strategy is As a firm, our senior leaders believe that
enthusiasm expressed by the teams underpinned by the quality of our training, we have a duty to make sure that all of our
for whom I have responsibility, their professional development and awareness people have the best possible environment
commitment as well as the commitment of, and compliance with, regulatory and to develop, progress and be effective.
of the entire firm, to embrace the legal requirements. We regard it as really This will be driven by myself, the Head of
Quality, Ethics and Excellence agenda. important to be crisp in the definition of Quality, Ethics and Excellence reporting
Our approach encompasses all of our Quality and that the progress in our level directly to our CEO. The firm wide team
service lines, support functions, teams of Quality can be measured over time. also makes promises to each other to
and people within our business. Two examples are: do the right thing, to comply with the
In Grant Thornton we embrace Shared rules and to build trust and integrity
• We are overlaying Quality measures
Enterprise and this brings with it in markets. The Quality agenda is being
in the Assurance business with a Root
responsibilities; all of our people set to ensure that we all comply with
Cause Analysis of matters identified
have a responsibility to themselves, our shared obligations.
by both internal and external file reviews
each other and the firm to ensure that
in order that better identification, ETHICS Reputations are hard won
the Quality, Ethics and Excellence
remediation and eradication measures and easily lost and therefore as a firm
agenda becomes firmly embedded
can be implemented and we can we work hard to ensure that we manage
as part of our cultural DNA.
share good practice. risks to our reputation that inevitably arise
Secondly, and most critically, the from doing business. We are therefore
• We are responding to observations by
measures and policies that we are extremely keen that risks arising as a
regulators in respect of our recording
developing, and in some cases have consequence of ethical connotations are
and monitoring of relationships and
already implemented, are showing signs managed effectively.
financial interests that could impact
of making a big difference. Looking at
our ability to act objectively or We have already introduced a more
the key components of our agenda there
independently. The requirement to fundamental Ethics Training module
are three broad strands, one each for
complete our Global Independent across the whole business, featured the
Quality, Ethics and Excellence.
System on a timely basis has been given new Ethical Standard training into our
QUALITY In terms of Quality, we high priority and more robust follow Assurance Conference and are currently
regard this as very much relating to our through policies are being applied. developing Ethics modules for inclusion
infrastructure, our people, our systems into all core training delivered by the
These form part of a number of measures
and our processes. Our strategy is to firm. Roll out and implementation will take
being adopted in our commitment to
ensure that our people have the best tools place during the current financial year.
continuous improvement in Quality.
at their disposal to develop themselves
and our business into being the first
choice firm for Assurance, Advisory
and Taxation services.Grant Thornton UK LLP Transparency Report 2016 9
However, we regard Ethics as being EXCELLENCE This is the third element of of timing of delivery of our work ie by not
much broader than formal procedures our agenda and we regard this as relating over promising and under delivering. The
and compliance set by legislation and to the services we deliver, the robustness monitoring of, and profile given to, CSRs
regulators. One of the first steps of the advice and recommendations will be a key feature of our Excellence
taken in my new role as Head of Quality, we give, the quality of the audits we agenda this forthcoming year.
Ethics and Excellence was to undertake a undertake and the value-add in all our
Excellence also requires us to have the
revamp of our Code of Conduct. In this we clients’ experiences.
right skills to fulfil assignments. We will
emphasised that we expect our people to
We want to be regarded as the achieve this by increasing the profile of
be professional, honest and trustworthy,
vibrant firm at the heart of growth our specialist Industry Groups and by
complying with all applicable ethical and
and for building trust and integrity in applying cross line of service teams
professional standards and regulatory
markets. Specifically, we consider the (where practical and permissible) and
requirements; it is important to us that
circumstances of a particular client collaborating in a way that our people
we not only do what is lawful but that we
situation, the direction of travel of their and clients enjoy the best experiences.
do what is right. Part of this will involve
organisation, the focus on management Increased awareness through
heightened procedures around take on
of the business and their appetite and communications from the Quality,
of our people and clients.
commitment to implementing change. Ethics and Excellence team will ensure
Our reputation is the firm’s most This is then set alongside an assessment that adherence to firm wide policies.
valuable asset and the Ethics agenda of our capability, ability to influence,
In an increasingly changing and volatile
is being shaped to ensure that all of our whether our people would want to work
business environment, professional
people recognise that they create and for the client and whether we can deliver
advisors are expected to create value
own that reputation. The Code of Conduct the work at a suitable return to ensure we
for clients and deliver consistent
highlights the key role that they have to can dedicate the right level of resources
Excellence by applying innovative and
play in ensuring that they behave in a to delivering high quality work and advice.
exciting solutions. We want to secure
manner conducive with the firm’s
Therefore, our first step is to make sure our standing as the firm that is known
benchmark. It also involves working
that we act for clients that we want to act for its ethical compass whilst creating
with clients who fit our culture, treat our
for and that we properly know our clients value by seizing opportunities in a
colleagues and people outside of the firm
before we enter into formal engagements. connected world.
fairly, support those who need help and be
We are also passionate about our
honest and straightforward with people
service levels and regularly monitor our
who are not doing the right thing. This is ADRIAN RICHARDS
performance by client service reviews
an integral part of our Ethics agenda. HEAD OF QUALITY, ETHICS AND EXCELLENCE
(CSRs) seeking always to maximise our
GRANT THORNTON UK LLP
scores. One measure of Excellence is
exceeding client expectations in terms
“We are committed to continually
developing our systems, processes and
people in a direction aligned with our purpose.
This will differentiate us from our competitors,
underpinned by Quality, Ethics and
Excellence in all that we do and I look
forward to reporting on our further
progress in our next report.”Grant Thornton UK LLP Transparency Report 2016 10
4.
MESSAGE FROM
THE HEAD OF AUDIT
AND ASSURANCE
We remain committed to enhancing the quality of our audits and delivering assurance
services to best support clients with real value and choice. Our investment in people,
audit technology and methodology is bearing fruit and we are broadening our wider
assurance offering to support trust and confidence in the market. As I complete my
first year in this role, I reflect on the personal commitment to quality from Sacha as CEO
and the challenge and support of our INEs that contribute to an environment of continual
improvement to ensure that our services address the needs of our stakeholders and that
our work further improves our reputation for audit capability and quality.
KEY ACHIEVEMENTS IN 2016 In 2016 TECHNOLOGY We have adopted an iCloud CLIENT TAKE-ON AND CONTINUANCE
we have continued in our efforts to based enterprise system to support audit We have invested in a team of
implement best practices across the engagement teams and facilitate better 28 professionals to augment our
audit workspace: connections with clients and their needs. independence checks and processes
as well as establishing an engagement
AUDIT DELIVERY MODEL Our dedicated PEOPLE DEVELOPMENT We have invested
quality control review team to increase
support team in Belfast has grown to 60 in our eLearning platform with structured
the consistency and client experience.
staff and is now being fully implemented in training days and dedicated materials to
the practice. This team means that audit assist in self-development of our people. QUALITY ASSURANCE We have
engagement teams have the right support We have established a programme of engaged with our stakeholders and
and have been freed up to focus on the quarterly reviews of our Responsible have incorporated feedback, particularly
more complex issues. The embedded Individuals (RI) and further aligned in areas such as root cause analysis which
centralised processes now mean that incentive schemes to the delivery of contribute to our continual improvement.
there is more consistency in the delivery high quality audits.
of our audits and the overall quality.Grant Thornton UK LLP Transparency Report 2016 11
EXTERNAL QUALITY ASSURANCE and training in recent years and the hard achieving high quality audits is easier,
At Grant Thornton we are inspected by a work of our dedicated audit teams. We we deliver deeper audit insight for our
number of regulators, details of which are fully recognise the need to maintain focus clients, and we increase the satisfaction
given in section 11 of this report. We are and execution in individual audit and enthusiasm of our people.
on an annual inspection cycle by the FRC’s assignments and within the firm’s systems
We will continue to invest in our people
Audit Quality Review (AQR) process. AQR in order to continually develop and
so that our work remains independent
assesses the quality of the audits of listed demonstrate our quality.
and robust as well as continuing to focus
and other major public interest UK entities
INTERNAL QUALITY ASSURANCE on developing the broad business skills
and the policies and procedures
We continue to run a substantial internal that will allow deeper insight, enhanced
supporting audit quality. We were pleased
audit quality review process to ensure scepticism and deliver excellent service.
with the results of our latest published
that our people are held accountable
inspection report. Of the seven examples Looking further out our vision for 2020 is
for producing high quality audits. 38%
of our audits reviewed in the 12 months to to be the go-to firm for assurance services
of all engagement leads were subject
December 2015, six were rated as “Good for dynamic organisations, delivering trust
to audit quality reviews in 2015. As a
with limited improvements required”. and confidence to the market. Our Vibrant
result of these reviews:
One was rated “improvements required”. Economy purpose is creating meaningful
None of our audits were assessed as • 32 audit partners or directors received conversations with key stakeholders
“significant improvement required”. This enhanced reward for achieving across all sectors, providing wider
improvement is consistent with the high standards of audit quality stakeholder engagement on market needs
quality improvements reported by the and opportunities.
• 13 audit partners or directors had
Quality Assurance Department (QAD) and
their profit share (or bonus) reduced
Public Company Accounting Oversight
due to audit quality results falling
Board (PCAOB) based on their review visits SUE ALMOND
below the firm’s benchmark. HEAD OF AUDIT AND ASSURANCE
in 2015 and the Public Sector Audit
Appointments limited (PSAA) annual review GRANT THORNTON UK LLP
PRIORITIES FOR 2017 AND BEYOND
in 2016, we need to ensure that this trend Grant Thornton International Limited
remains consistent. These reviews give us (GTIL) member firms are progressing a
a strong indication that we’re moving in watershed project, investing approaching
the right direction and consistently placing US $100m to redesign and develop of a
quality and excellence at the heart of what new global audit and analytics technology,
we do. It also reflects the major with supporting audit methodology and
investment we have made in technology learning. The project will ensure that
“High quality audits and the delivery
of value enhancing wider assurance services
is the bedrock of creating trust & integrity
in markets. This is a key aspect of our wider
purpose, and the investments we have made
in our people and processes will continue
as we work to ensure we are always
delivering the best for our clients.”Grant Thornton UK LLP Transparency Report 2016 12
5.
LEGAL STRUCTURE,
OWNERSHIP AND
THE INTERNATIONAL
ORGANISATION
LEGAL STRUCTURE throughout the United Kingdom. PRINCIPAL SUBSIDIARY UNDERTAKINGS
GRANT THORNTON UK LLP In addition, we have branch offices Set out below is a list of the principal
in the British Virgin Islands and the subsidiary undertakings of Grant Thornton
The firm is incorporated under the Limited Cayman Islands. Our website has a current UK LLP at 30 June 2016, along with
Liability Partnerships Act 2000, and list of our office addresses. details of their principal activity.
registered in England and Wales
(registered number OC307742).
In this report, Grant Thornton UK LLP COMPANIES PRINCIPAL ACTIVITY
is referred to variously as: the firm, the
LLP, Grant Thornton, we, our and us. Grant Thornton Business Services Employment of personnel
OWNERSHIP The firm is entirely owned Grant Thornton Specialist Services Insolvency and restructuring
by its members (normally referred to as (Cayman) Limited advisory services
partners). At 30 June 2016, there were
Grant Thornton (British Virgin Islands) Limited Insolvency and restructuring
179 members (2015: 184). A list of the
advisory services
members is available for inspection at the
firm’s registered office: Grant Thornton Fulwood Insurances Limited Insurance services
House, Melton Street, Euston Square,
London NW1 2EP. Grant Thornton Debt Solutions Limited* Personal insolvency services
OUR BUSINESS Grant Thornton is a Geniac UK Limited Management of business
leading financial and business advisory support functions
firm focused on working with dynamic The Local Futures Group Limited Licencing of intellectual
organisations. We are structured along property services
geographical, industry and service lines
enabling us to offer our clients a great
depth of expertise delivered in a distinctive LIMITED LIABILITY PARTNERSHIP PRINCIPAL ACTIVITY
and personal way. Our principal services
are audit and assurance, tax and Grant Thornton Services LLP Employment of personnel
advisory services. A full list of our
Grant Thornton Employee Benefits LLP Employee benefits
services can be found on our website.
consultancy services
At 30 June 2016, the firm employed
4,629 people (2015: 4,461), and * Grant Thornton Debt Solutions Limited is a joint venture in which the firm owns 50% of the called up share capital.
operated from 26 offices (2015: 26) The remaining 50% is owned by Grant Thornton Holdings Limited, a company registered in Ireland.Grant Thornton UK LLP Transparency Report 2016 13
THE INTERNATIONAL GOVERNANCE AND LEADERSHIP • overseeing general governance
The key governance and leadership matters, such as the composition
ORGANISTION
bodies of GTIL are the Board of Governors and performance of the Board.
Grant Thornton UK LLP is the UK member and the Global Leadership Team (GLT). GTIL’s year end is 30 September,
firm of Grant Thornton International Ltd Their roles and responsibilities are set so the latest available data is
(GTIL). GTIL is a private company limited out, in summary, below. therefore to 30 September 2015.
by guarantee, incorporated in England
and Wales. It is an umbrella organisation INTERNATIONAL BOARD OF GOVERNORS The Board members as at 30 June
that does not provide services to clients. The Board of Governors (the Board) is 2016 are:
Services are delivered by member the principal and overriding authority
• Scott Barnes, Chair, board member
firms around the world using common in GTIL. The Board is a group selected
methodologies ensuring the clients from Grant Thornton member firms • Peter Bodin, Sweden
of all member firms have a consistent worldwide and exercises governance
• Pascal Boris, independent board
experience and standard. on their behalf. The Board comprises
member
the chief executive officer of GTIL,
At 30 September 2015, GTIL had managing partners from the largest • Vishesh Chandiok, India
140 independent member firms Grant Thornton member firms, managing
(2014: 130) with aggregate revenues • Marivic Españo, Philippines
partners elected from Grant Thornton
of US$4.6 billion (2014: US$4.7 billion), member firms which are not amongst • Gagik Gyulbudaghyan, Armenia
and more than 42,000 people. the largest and independent directors.
• Arnaldo Hasenclever, Argentina
A full list of Grant Thornton member The Board aims for a reasonable
firms across the world is available on balance of representation from • Xu Hua, China
our website. The total turnover from different geographical areas, including
emerging markets. The Board’s • Emilio Imbriglio, Canada
Grant Thornton member firms across
the world resulting from the audit of responsibilities include: • Vassilis Kazas, Greece
annual and consolidated financial • providing input into the strategic • Greg Keith, Australia
statements is US$1.953 billion. development of GTIL and approving
the global strategic direction and • Daniel Kurkdjian, France
MEMBER FIRM ADMISSIONS Prospective
member firms must meet a number of policies of GTIL as established • Kevin Ladner, Canada
criteria in order to be considered for by the CEO
• Mike McGuire, US
membership, which include: • overseeing the implementation
of the global strategy • Ed Nusbaum, CEO, Grant Thornton
• the prospective firm’s reputation International Ltd
for quality and its adherence to • overseeing membership matters,
high standards (including approving new member firms, • Sacha Romanovitch, UK
• adoption of global policies, suspending the rights of, or expelling • Judith Sprieser, independent
procedures and methodologies, a member firm) board member
including methods and quality control • appointing and setting the remuneration
systems for providing services to of the Chair of the Board
clients, engagement protocols, and
ethical and independence policies • appointing, evaluating performance and
setting the remuneration of the CEO
• maintenance of a system of quality
control that meets or exceeds • approving the budget and member
International Standard on Quality firm fees
Control 1 (ISQC 1) • overseeing the financial health of GTIL
• agreement to the periodic evaluation • overseeing global enterprise
of the system of quality control by risk management
the global quality monitoring teams.Grant Thornton UK LLP Transparency Report 2016 14
GRANT THORNTON INTERNATIONAL CHIEF EXECUTIVE OFFICER The CEO THE GLOBAL LEADERSHIP TEAM
LIMITED GTIL assists all Grant Thornton is appointed by the Board for an initial The GLT drives the execution of the global
member firms in delivering consistent, term of up to five years renewable once strategy and is chaired by the CEO. It is a
robust, rigorous and high quality audits. for a further period of up to three years. full-time management group and its
This is achieved through the provision of a The CEO, Ed Nusbaum, is responsible for current members are:
global audit methodology and software; the leadership of GTIL. The role of the
• Ed Nusbaum, CEO, GTIL
protocols to facilitate consultation with CEO includes the development and
audit specialists in other member firms; a recommendation of global strategic • Ken Sharp, global leader,
comprehensive intranet service with priorities for ratification by the Board, assurance services
up-to-date information on relevant together with overseeing execution
• Paul Raleigh, global leader, growth
professional standards; a worldwide of these priorities. The CEO has
and advisory services
restricted-entity list; an International responsibility for appointing the Global
Financial Reporting Standards help desk; Leadership Team (GLT) subject to the • Francesca Lagerberg, global leader,
and topical alerts. GTIL does not provide concurrence of the Board. The GLT assists tax services
any services to clients itself. the CEO in the execution of the global
• Gernot Hebestreit, global leader,
strategy. The CEO works closely with the
CHAIR OF THE BOARD The Chair of business development and markets
GLT in maintaining global policies and
the Board (the Chair) is a proactive
procedures, including those governing • Stephanie Hasenbos-Case, global
role with a focus on ensuring that the
international work for the assurance, tax leader, People and Culture
Board functions as a coordinated group
and advisory service lines.
in support of the CEO on global strategy, • Robert Quant, global leader
including but not restricted to provision capacity and effectiveness
of distinctive client service by the
member firms.
The current Chair is Scott Barnes and
his current term runs to December 2017.
The role of the Chair is pivotal to creating
the conditions necessary for a highly
effective Board, focused on our
strategic global development.Grant Thornton UK LLP Transparency Report 2016 15
AUDIT QUALITY GTIL views excellence Each member firm is obligated to submit The inspection team, as part of evaluating
as essential to the network’s brand, to an inspection of its quality control engagement performance, also reviews
with a particular focus on audit quality. system, referred to as the Grant Thornton a sample of assurance engagements.
To that end, global resources are provided Audit Review (GTAR), at least once On conclusion of each GTAR, the global
to assist member firms in maintaining every three years. The GTAR process organisation issues a report based on
audit quality, including: is designed to monitor member firm the inspection findings. The report on a
compliance with professional standards member firm’s quality control system
• an audit methodology, with supporting
and global audit policies and procedures. will report one of the following:
state-of-the-art software, that is
used globally The GTAR is conducted by independent • suitably designed and operating
and suitably qualified partners and effectively (an unqualified report)
• policies and procedures contained
managers from other member firms
in audit manuals that are benchmarked • suitable designed and operating
under the overall direction of the
against international auditing, effectively except for one or
global audit quality control leader.
quality control, independence more significant deficiencies
and ethics standards GTAR inspection teams review the conduct (an except for report)
of audit work performed by each member
• protocols that enable member firms • having material weaknesses in the
firm. The inspection process includes
to consult with the global auditing design or operation of the quality
an evaluation of policies and procedures
standards team and, if necessary, control system (an adverse report).
of the member firm applicable to its
with audit specialists in other
assurance practice, benchmarking When the GTAR identifies a deficiency,
member firms
those policies and procedures against the member firm is expected to address
• protocols that enable member firms to relevant policies and procedures of the the deficiency and document their action
consult with GTIL’s International Financial international organisation. The inspection plan to address the findings within a
Reporting Standards (IFRS) helpdesk team reviews financial statements, audit reasonable period of time and submit
reports and engagement work papers and appropriate documentation. When
• a comprehensive intranet service that
files. The inspection team also interviews follow-up actions are required by
includes up to date information for
partners and people on various matters. member firms to address findings
member firms on auditing, financial
identified during the GTAR, a further visit
reporting, ethics and independence The GTAR inspection team member
or remote assessment is made to review
standards and guidance on applying assess whether a member firm’s
progress in implementing these actions.
them effectively. system of quality control is designed,
implemented and operated to provide There are equivalent review processes
AUDIT QUALITY MONITORING A key
the member firm with reasonable for other network services.
component of the global strategy is
assurance that the member firm and
to promote the delivery of consistent,
its personnel comply with professional
high quality client service worldwide.
standards and applicable legal and
To support this objective, a dedicated
regulatory requirements; and the
quality monitoring programme was
reports issued by the member firm
developed to support the assurance
are appropriate in the circumstances.
practices of the member firms. This
These include leadership responsibilities
global monitoring programme uses
for quality, ethics and independence,
the Sentinel software application and
client acceptance and continuance,
focuses on the six elements of ISQC 1.
human resources, engagement
Under this programme, member firms
performance and monitoring.
are provided with feedback on the
design, implementation and operation
of their assurance practice quality
control systems.Grant Thornton UK LLP Transparency Report 2016 16
SECTION 6
LEADERSHIP AND
GOVERNANCE
For the year ended 30 June 2016 the firm’s principal leadership and governance bodies
were the Strategic Leadership Team (SLT), which runs the firm as an executive function,
and the Partnership Oversight Board (POB), which provides oversight of the SLT on behalf
of the members (the ‘partners’).
The firm’s membership agreement sets MANAGEMENT OF OUR BUSINESS four-year terms. Sacha Romanovitch
out the members’ rights and obligations, CHIEF EXECUTIVE OFFICER The CEO was appointed CEO for a first term on
the firm’s governance framework and the has full executive authority for the 1 July 2015. The CEO is bound by the
key responsibilities for the management management of the business. Nominated firm’s Statement of Principles, which is
of our business. by the POB, the appointment is confirmed the firm’s highest level statement of
by an all-partner vote. The CEO may objectives, values and philosophy.
be appointed for no more than two
FIRM’S LEADERSHIP AND GOVERNANCE STRUCTURE FROM 1 JULY 2016
EXTERNAL STAKEHOLDERS (INC PARTNERS)
PARTNERSHIP OVERSIGHT BOARD AND INDEPENDENT NON EXECUTIVES (CHAIR: STEVE MASLIN EX 31 MARCH 2016. ED WARNER AS OF 1 APRIL 2016)
SUB-COMMITTEES: RISK & AUDIT: TIM LINCOLN, REMUNERATION & PROFIT SHARING: ED WARNER
RICHARD EYRE (INE) EX 31 DECEMBER 2015, CAROLINE GOODALL (INE), DEENA MATTAR (INE) AS OF 19 FEBRUARY 2016, PAUL FLATLEY, TIM LINCOLN,
MO MERALI, STEPHEN MILLS, TRACEY JAMES, SIMON BEVAN, NIGEL MORRISON
STRATEGIC LEADERSHIP TEAM
FINANCE CHIEF
OPERATIONS BRAND & CULTURE ENTERPRISE STRATEGIC CLIENTS
& INFRASTRUCTURE EXECUTIVE OFFICER
ROBERT HANNAH SIMON JONES NORMAN PICKAVANCE KARL EDDY MARK BYERS SACHA ROMANOVITCH
WIDER LEADERSHIP TEAM
OPERATIONS SUPPORT SERVICES BRAND & CULTURE ENTERPRISE CLIENT QUALITY & BUSINESS RISK &
RELATIONSHIP ETHICS QUALITY ASSURANCE
LONDON ASSURANCE FINANCE BRAND AND MARKETING PRACTICE DIAMOND PAUL ETHERINGTON MARGARET BOWLER
& TAX DEVELOPMENT ACCOUNTS EX 30 APRIL 2016.
IS COMMUNICATIONS
LONDON TRANSACTIONAL INTERNATIONAL ADRIAN RICHARDS
PROPERTY PEOPLE & CULTURE AS OF 1 MAY 2016
ADVISORY DEVELOPMENT
PARTNER AFFAIRS
LONDON OPERATIONAL STRATEGIC
ADVISORY PARTNERSHIPS QUALITY, ETHICS
CENTRAL REGION DELIVERY & & EXCELLENCE
METHODOLOGIES
SOUTH REGION
TAX
NORTH & MIDLANDS
REGION ASSURANCE
SCOTLAND & NORTHERN ADVISORY
IRELAND REGION
INDUSTRIES
PRACTICE AND INDUSTRY LEADERSGrant Thornton UK LLP Transparency Report 2016 17
This is developed with the POB and • monitoring the CEO’s stewardship EVALUATION OF POB MEMBERS A formal
approved by the members at least of the business review of the effectiveness of the POB and
every three years. The partners its chair was carried out in 2013, led by
• oversight of remuneration of the SLT
voted to defer updating the Statement one of the INEs. This review consisted of
of Principles to later in 2016 to allow • overseeing the principles and criteria an online confidential questionnaire to all
the new SLT to complete its for profit sharing partners and will be repeated periodically.
Strategic Review. During 2015/16 the POB held all partner
• oversight of risk and quality policies
meetings, lunches and dinners with
STRATEGIC LEADERSHIP TEAM and procedures
partners across the whole firm to seek
The CEO appoints the SLT, which
• recognising that we have a public their feedback on issues of concern to the
is responsible for:
interest role that extends beyond the partners. In addition during February and
• ensuring the firm operates within short-term interests of the partners. March 2016 Ed Warner visited nine office
the LLP’s Statement of Principles locations to meet with partners prior to
The POB consists of eight members
formally taking on the role as chairman to
• protecting the goodwill and elected by the partners, three independent
seek partner feedback on the role of the
reputation of the firm non-executive members (INEs), and three
POB. The minutes of POB meetings are
ex-officio non-voting members (being the
• developing and implementing also circulated to all partners in the firm.
CEO and two others – members of the
the firm’s strategy
executive management team. Elected INDEPENDENT NON-EXECUTIVES
• appointing, appraising and (where members are appointed for a period The firm has three INEs with a wide
necessary) removing partners, and of three years, and may serve for two range of experience and skills, including
determining their remuneration further consecutive terms if re-elected. experience of professional partnerships,
corporates and the investor community,
• ensuring the firm complies Brief biographies of the POB members
and with experience covering a wide
with all relevant regulatory at 30 June 2016 are set out in section 15.
range of industries including professional
and legal requirements Their appointment dates and meeting
services, financial, technology, retail,
attendance records during the year
• ensuring that quality is central charity, and media industries.
are set out later in this section.
to our work and our approach
The INEs are ‘outside members’ of
CHAIRMAN OF THE POB The chairman
• driving a profitable and sustainable firm. Grant Thornton UK LLP as defined by
of the POB, until 31 March 2016 was
the firm’s membership agreement, and
The SLT for the year ended 30 June Steve Maslin. On 26 November 2015
as such are part of our POB with voting
2016 consisted of the following partners: following a majority vote of POB members
rights which are only exercised by the
Sacha Romanovitch, CEO; Mark Byers, it was agreed to appoint Ed Warner as the
INEs when to do so would not compromise
Strategic Client Relationships; next chairman of the POB. Ed Warner is
their independence. Each INE serves an
Karl Eddy, Enterprise; Robert Hannah, the first independent chairman of any
initial first term of three years, and is
Operations; Simon Jones, Finance and major accountancy firm in the UK.
eligible for reappointment without
Infrastructure; Norman Pickavance, Brand This was confirmed by a vote of more
restriction, as determined by the
and Culture. All were in post throughout than 75% of all partners voting on a
elected members of the POB.
the year to 30 June 2016. resolution issued on 15 December 2015.
Ed Warner formally took over as an On 31 December 2015 Richard Eyre
PARTNERSHIP OVERSIGHT BOARD retired as an INE having served five years.
independent chairman on 1 April 2016 for
The POB is responsible for the protection Deena Mattar was appointed an INE on
a three-year period. Ed is responsible for
of partners’ interests, standards of 19 February 2016.
chairing POB meetings and for providing
governance within the firm, and the
guidance to the CEO on actual and
oversight of the SLT. Its principal
potential matters of concern to the
duties are:
partners.
• development of the firm’s Statement
of Principles
• appointment (and, if required, the
removal) of the CEO, subject to the
vote of membersGrant Thornton UK LLP Transparency Report 2016 18
The INEs bring their considerable IMPACT OF INES ON THE FIRM’S RISK & AUDIT COMMITTEE
expertise to the POB and are responsible INDEPENDENCE The POB is a The RAC is responsible for ensuring that
for contributing to the overall governance ‘supervisory board’ as envisaged by the the firm’s quality and risk management
of the firm, and specifically: Auditing Practices Board (APB), Ethical framework is appropriate and operating
Standards for Auditors issued by the FRC effectively. Its specific duties include:
• the firm’s recognition of its public
and, therefore non-executive members of
interest responsibilities and its • overseeing policies and procedures
the POB are not members of the firm or its
attitude towards quality on quality and risk management
‘chain of command’. As a result, personal
(including ethics and independence)
• the firm’s approach to risk management relationships and business or financial
and governance interests of the INEs do not bear directly • monitoring and reviewing the
on the firm’s independence as auditors. effectiveness of the firm’s internal
• issues raised under whistleblowing
However, the firm is mindful of the impact audit function and the timeliness and
policies and procedures.
of public perception, so we require the effectiveness of management’s
The INEs attend all POB meetings and are INEs to comply with the independence corrective actions
invited to attend partners’ meetings, and requirements of partners and specifically:
• overseeing management’s response
to meet with the CEO and the chair of the
• on a quarterly basis the INEs confirm to to any major external or internal
POB periodically. Our INEs also meet with
the chair of the POB that they have no audit recommendations
key representatives from the institutional
financial interest or directorships with
investor community from time to time. • monitoring the firm’s relationship
any of the firm’s audit clients listed in
In addition to their representation on the with its external auditors and
the firm’s prohibited investments list
POB, Caroline Goodall is also a member external regulators
of the Risk & Audit Committee and Profit • on an annual basis they confirm in the
• reviewing the firm’s
Sharing subcommittees, Ed Warner is firm’s annual declarations process that
financial statements.
Chair of the Profit Sharing subcommittee they understand and have complied
and a member of the Remuneration with the firm’s key ethical policies The RAC consists of four elected
Committee, and Richard Eyre, now including independence, confidentiality, members of the POB, the CEO and
replaced by Deena Mattar, is a member market abuse, gifts and hospitality, at least one INE. The head of Business
of the Profit Sharing subcommittee. and whistleblowing. Risk and Quality Assurance, the national
Our INEs contribute to audit quality director of finance and the Head of
In the event that there was a fundamental
through their involvement in the Profit Quality, Ethics and Excellence are invited
disagreement between an INE and either
Sharing subcommittee and Risk & Audit to attend as appropriate. In addition,
the POB or the SLT that could not be
Committee (RAC) which included reviews representatives of the firm’s external
resolved following discussions with the
of the process to ensure quality gradings auditors, Mazars (UK) LLP, are invited
chair of the POB and the CEO, and as a
of all audit partners are appropriately to attend.
result the INE resigned from the firm,
taken into account in determining
the fact that there had been such a The RAC met six times last year, and
partner profit share. During the year the
disagreement would be disclosed in three of these meetings were attended,
INEs have also participated in other ad hoc
this transparency report. No such in part, by the external auditors.
subcommittees as required, for example
disagreement has occurred to date
in relation to significant property REMUNERATION COMMITTEE (RemCo)
transactions, reviewing a proposed SUBCOMMITTEES The POB has two The RemCo is responsible for setting
business acquisition, and the CEO main subcommittees that deal with the remuneration of the CEO and the
succession planning process. key aspects of governance: the RAC remuneration framework of the SLT,
and the Remuneration Committee. dependent upon the achievement of
The POB’s oversight of management predetermined criteria and goals.
and the establishment of separate The committee, which consists of
RAC ensure that the firm complies three elected POB members and at
with appropriate corporate least one INE, met three times last year.
governance, risk management Further information on the remuneration
and quality standards. of audit partners is included in section 13.Grant Thornton UK LLP Transparency Report 2016 19
MEETING ATTENDANCE: YEAR TO 30 JUNE 2016
MEETINGS
APPOINTED SLT POB RAC REMCO
NUMBER OF MEETINGS IN YEAR 9 6 6 3
STRATEGIC LEADERSHIP TEAM
MARK BYERS 1 JULY 2015 6
KARL EDDY 1 JULY 2015 9 1
ROBERT HANNAH* 1 JULY 2015 9 1
SIMON JONES* 1 JULY 2015 9 6 6
NORMAN PICKAVANCE 1 AUGUST 2015 8 1
SACHA ROMANOVITCH* 1 JULY 2015 9 6 5 3
PARTNERSHIP OVERSIGHT BOARD
SIMON BEVAN 1 JULY 2015 5 2
PAUL FLATLEY 1 JULY 2009 5 5
TRACEY JAMES 1 SEPTEMBER 2015 6
TIM LINCOLN 1 OCTOBER 2006 6 6
STEVE MASLIN (CHAIR) 1 JULY 2007 6 6 2
MO MERALI 1 JULY 2009 4 3
STEPHEN MILLS 1 JULY 2014 6 5
NIGEL MORRISON 1 JULY 2015 6
INDEPENDENT NON-EXECUTIVES
RICHARD EYRE RETIRED ON 31 2
DECEMBER 2015
CAROLINE GOODALL 15 SEPTEMBER 2010 5 5
DEENA MATTAR FROM 19 FEBRUARY 2016 2 1
ED WARNER 15 SEPTEMBER 2010 6 3
Coloured to represent ‘attendance by invitation’ * Members of previous National Leadership BoardGrant Thornton UK LLP Transparency Report 2016 20
7.
REPORT FROM THE
CHAIRMAN OF THE RISK
& AUDIT COMMITTEE
The Risk & Audit Committee (RAC) is the governance body which reviews the preparation
and audit of the firm’s financial statements and reviews the standards of internal control,
quality assurance and risk management of the firm’s business.
It is a standing sub-committee of the Given the nature of the services that AUDIT QUALITY Audit quality is of
Partnership Oversight Board (POB). our firm provides, and the competitive paramount importance to the firm and
The members of the RAC are all drawn marketplace in which we operate, the to the RAC. In order to ensure that the firm
from the POB and appointed by the quality of our services, particularly in is appropriately responding to the output
Chair of the POB. As at 30 June 2016 audit, is of key importance to the RAC. from all internal and external regulatory
the members of the Risk & Audit reviews, during the financial year to 30
MEETINGS The RAC typically meets five
Committee were as follows: June 2016 the RAC has received and
to six times a year and reports directly
considered ICAEW reports following
• Sacha Romanovitch to the POB on its activities. Minutes of
the ICAEW practice assurance visit and
the RAC meetings are made available
• Paul Flatley from our internal National Assurance
to all partners. In addition to the RAC
Services team in respect of its National
• Simon Jones members, also in attendance for at
audit file reviews. The RAC also receives
least one committee meeting per
• Tim Lincoln updates following FRC Audit Quality
year, as appropriate, were:
Review team (AQR) reports and
• Steve Maslin
MARGARET BOWLER - Head of international audit file reviews.
• Stephen Mills Business Risk and Quality Assurance
We have discussed the results of these
• Caroline Goodall OWEN BROOKMAN - General Counsel reviews with management as appropriate
to ensure quality remains a priority
TERMS OF REFERENCE Executive PAUL ETHERINGTON - Quality &
management objective, and continue
management led by the SLT are Professional Affairs Leader (ex-officio
to monitor this area to ensure progress
responsible for setting the tone of member of the POB) Replaced by Adrian
is made in areas of concern or where
the firm’s attitude to quality and risk. Richards Head of Quality, Ethics and
weaknesses are identified. More details
The RAC’s primary responsibility is Excellence as of May 2016.
on the output of reports from our external
to act as an oversight of the firm’s risk
MALCOLM NORTHOVER - Retired and regulators are set out in section 11.
management and internal audit functions
replaced by Mark Reddy - National
and to review the external audit process. In addition to the above quality assurance
Director of Finance as of April 2016
The terms of reference of the RAC, which reviews, the POB give consideration as to
are regularly reviewed and updated to ROY WELSBY - Partner Quality & how management ensure that audit quality
reflect the challenging and changing Professional Standards and Money gradings are reflected in audit partner and
environment in which we operate, Laundering Reporting Officer director remuneration both positively
are available on our website. and negatively.
Our activities and areas of focus
during the year to 30 June 2016 are
set out as follows.You can also read
