Transparency report 2016 - Grant Thornton Morocco

Transparency report 2016 - Grant Thornton Morocco
GRANT THORNTON UK LLP

TRANSPARENCY REPORT 2016
QUALITY, ETHICS AND EXCELLENCE
Grant Thornton UK LLP Transparency Report 2016                                                                                                      2




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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 HOURS
Grant 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 COMMITTEE
Grant 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’s
Grant 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 LEADERS
Grant 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 members
Grant 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 Board
Grant 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.
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