30 September 2011
This report by Buzzacott LLP has been prepared to meet the requirements of the Statutory Auditors (Transparency) Instrument 2008 (the “transparency regulations”) for the year ended 30 September 2011.
1. Legal structure and ownership
Buzzacott LLP (“Buzzacott” or “the Firm”) is a limited liability partnership, incorporated in Great Britain and is owned by its Designated Members (who are referred to as “partners”). As at 30 September 2011 there were 19 Designated Members. The Firm operates from a single office based in London.
2. IGAF Worldwide
The Firm is a member of IGAF Polaris. IGAF Polaris is among the strongest associations of independent accounting firms in the world, comprised of over 350 highly successful independent public accounting firms in over 85 countries.
Formed from a merger in 2011, IGAF Polaris provides its independent member firms with tools and resources to help them furnish superior accounting, auditing, tax and management services to clients around the globe. Through IGAF Polaris, independent member firms offer the strength and capabilities of a large, worldwide organisation with technical depth and geographic reach impossible for a local firm alone.
There is no common control, ownership or strategy across the IGAF Polaris member firms, and IGAF Polaris is not aimed at cost or profit sharing across its members. Therefore IGAF Polaris is not a ‘network’ as defined in the Statutory Auditors (Transparency) Instrument 2008.
3. Governance structure
The leadership of the Firm is the responsibility of the Managing Partner. The governance and committee structure of the Firm is set out in the following diagram:
Governance and Committee Structure
Terms of Reference for key governance committees
||Equity Partner Meetings|
|Frequency of Meetings
||Quarterly + special topic meetings as required|
||Overall direction and strategy of the Firm and major partnership decisions.|
||Equity Partners/ Members of the LLP (currently 19).|
||Chairman of Buzzacott.|
|Frequency of Meetings||Monthly.
Responsibility for the overall management of the Firm and monitoring of
|Membership||Managing Partner, Chairman, Compliance Partner, Team Leaders and
Finance and Administration Partner.
|Frequency of Meetings||As required.
||Making of partnership remuneration and distribution of equity proposals to equity partners.
|Membership||Membership is made up of three elected Partners who each serve for three years on rotation, with a new member joining each year. The Managing Partner attends as an ex officio member.
||The longest serving member acts as Chairman.|
4. Internal quality control systems
Buzzacott has implemented a number of internal quality control systems to ensure that our high standards are maintained.
The Firm’s Audit Compliance Partner (for the purposes of complying with Institute of Chartered Accountants in England & Wales (ICAEW) regulations) is required to ensure that the Firm has complied, and will continue to comply, with audit regulations. He is also the first point of contact with the ICAEW.
The Firm maintains an Audit Compliance Manual which sets out in detail the audit procedures which must be followed. This manual is available to all staff involved in audit assignments and regular training is provided to ensure compliance.
All audit files are reviewed by a manager and the Senior Statutory Auditor (SSA) at both the planning and the completion stages.
A second SSA “hot review” is required on all “high risk” assignments and a second SSA hot review of accounts with qualified audit reports and/or complex issues may be required before the completion of the audit report. Details of the precise criteria which require the performance of a hot review are established by the Firm’s Audit & Assurance Technical Committee.
Cold file reviews are performed on a comprehensive basis of the Firm’s high risk clients and a random sample of other clients ensuring each SSA’s work is reviewed at least annually. These cold file reviews are performed independently by representatives of the Firm’s external compliance consultants (SWATuk). Detailed reports are provided to the Audit & Assurance Technical Committee and remedial action and follow-up is taken if necessary.
Statement on the effectiveness of the internal quality control system
The Firm’s management considers that the internal quality control system is functioning at a suitable level of effectiveness to enable us to maintain our internal quality standards and comply with our professional and legal requirements.
5. External monitoring
The Firm is subject to regular external monitoring by the Quality Assurance Directorate of the ICAEW. The Firm’s last QAD review took place in October 2008.
6. Independence procedures
The Auditing Practices Board (APB) publishes Ethical Standards which provide regulations and guidance on possible threats to integrity, objectivity and independence in the conduct of audit engagements as well as on potential safeguards which may be instituted to counteract those threats.
In respect of its responsibility as regulatory body for auditors and, with the Institute of Chartered Accountants of Scotland and the Institute of Chartered Accountants in Ireland, the ICAEW publishes rules under which auditors will be regulated; the Audit Regulations.
The Firm’s policies are consistent with these requirements and, in respect of audit services, are contained in the Firm’s Audit Compliance Manual which all audit staff must follow.
Within the Firm, overall responsibility for compliance with the Audit Regulations rests with a partner designated as Audit Compliance Partner as described above. In accordance with the APB Ethical Standards, an Ethics Partner has also been appointed.
Members of staff are made aware of ethical considerations on commencement of their employment and on regular courses which are provided by SWATuk.
All partners and staff complete an annual declaration of their independence and must notify the Firm of any circumstances which may affect their independence, or of any potential or actual conflicts of interest.
Acceptance and continuance of clients and engagements
Before accepting a new appointment, the SSA must consider and justify the decision to accept the appointment. In doing so the SSA will consider (amongst other areas) independence, ethics and risk issues, the Firm’s expertise and resources and its ability to carry out the work and the Firm’s money laundering procedures.
An internal review of independence practices is included in the Annual Compliance Review which is conducted by SWATuk. Buzzacott LLP confirms that the Annual Compliance Review has been conducted this year.
A formal report is made to the Firm’s Audit & Assurance Technical Committee and any points arising are the subject of action points.
7. Continuing professional development
All SSAs in the Firm are members of the Institute of Chartered Accountants in England and Wales (ICAEW). All members must undertake Continuing Professional Development (CPD) to ensure that they continue to maintain their skills and knowledge.
Close monitoring of Continuing Professional Development is performed by the Firm for all qualified members of staff. This ensures that all persons in the Firm eligible to be appointed as an SSA continue to maintain their theoretical knowledge, professional skills and values at a sufficiently high level.
8. Financial information
The transparency regulations require financial information to be provided which shows the importance of statutory audit work to the Firm.
The information in respect of the year to 30 September 2011 is, as yet, unaudited.
|Non audit services to audit clients
|Non audit services to non audit clients
The Firm’s revenues from non-audit services to audit clients include accounts preparation work for unlisted clients, corporation tax work, tax planning, payroll services, personal tax work and general business advice.
When undertaking non-audit work for an audit client, the requirements of the Ethical Standards for Auditors and the Firm’s acceptance procedures described above are applied before the work is accepted.
9. Partner remuneration
Each partner is subject to a performance review with the Managing Partner, and partners are remunerated according to a number of factors including those arising from this review.
The Firm considers that no partner remuneration is contingent upon any basis that would compromise the independence of any audit, including the sale of non-audit services.
Approved on: 22 December 2011
List of public interest entities
The Firm made an audit report on the following public interest entities in the year ended 30 September 2011:
Nexus Management Plc
Consolidated Africa Mining Plc