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Transparency Report


Transparency report
30 September 2015

This report by Buzzacott LLP has been prepared having regard to the requirements of the Statutory Auditors (Transparency) Instrument 2008 ("the transparency regulations”) for the year ended 30 September 2015. Buzzacott LLP has not made a report on a public interest entity during the year and therefore this report is not required by law.  However, in the interests of transparency our report is presented here.

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 members. As at 30 September 2015 there were 22 individuals who were members (who are referred to as 'Equity Partners’). The Firm operates from a single office based in London.

2. PrimeGlobal
The Firm is a member of PrimeGlobal, an association of independent accounting firms, comprised of approximately 300 independent public accounting firms in 90 countries.

PrimeGlobal 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 PrimeGlobal connections, 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 PrimeGlobal member firms, and PrimeGlobal is not aimed at cost or profit sharing across its members. Therefore PrimeGlobal 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 as follows:

Governance and Committee Structure

 Terms of Reference for key governance committees

      
Committee Equity Partners
Frequency of Meetings Bi-monthly
Purpose Overall direction of the firm and major partnership decisions
Membership Equity Partners
Chairman Senior Partner of Buzzacott

 

Committee Executive Committee
Frequency of Meetings Monthly
Purpose Overall management of the Firm and monitoring of performance against budget
Membership Managing Partner, Team leaders and executive managers
Chairman Managing Partner

 

Committee Equity Committee
Frequency of Meetings As required
Purpose To recommend Equity partner remuneration and distribution of equity
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.
Chairman The longest serving member acts as Chairman.


4. Internal quality control systems

In respect to its audit services, Buzzacott has implemented a number of internal quality control systems to ensure that our high standards are maintained.

Audit compliance
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.

File reviews
All audit files are reviewed by a manager and the Senior Statutory Auditor (SSA)/Responsible Individual (RI) at both the planning and the completion stages.

The firm’s Audit Compliance Manual sets out requirements for an Engagement Quality Control Review (‘EQCR’) for certain assignments, including audits of public interest entities and audits where such a review is required by laws or regulations.

The manual also sets out the requirements for a second SSA ’hot review’ on high risk assignments and of audits of financial statements on which a qualified audit opinion is proposed and/or with complex issues.

EQCR reviews and hot reviews must be completed before approval of the audit report.

Details of the precise criteria which require the performance of an EQCR review or hot review are established by the Firm’s Audit & Assurance Technical Committee.

Cold file reviews of the Firm’s higher risk clients are performed on a comprehensive basis, together with cold reviews of a random sample of other clients, ensuring each SSA/RI'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 and follow-up action 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 Department (QAD) of the ICAEW. The Firm’s last audit QAD review took place in March 2012. A Practice Assurance review was performed by the QAD in February 2015.

6. Independence procedures
The Financial Reporting Council (FRC) 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 Buzzacott
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 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 both internally and 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 of clients and engagements
Before accepting a new appointment, the SSA/RI must consider and justify the decision to accept the appointment. In doing so the SSA/RI will consider (amongst other areas) independence, ethics and risk issues, the Firm’s expertise, values and resources, its ability to carry out the work and the Firm’s anti-money laundering procedures.

Monitoring
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 in the year under review.
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 SSA/RIs 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/RI 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.


 

 
 
year ended
30 September 2015
£m
(unaudited)
 
year ended
30 September 2014
£m
Audit services 9.0   8.5
Non-audit services to audit clients 1.9   2.3
Non-audit services to non-audit clients 21.7   19.4
Total revenue 32.6   30.2


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 and general business advice.

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.

Buzzacott LLP
Approved on: 22 December 2015


Appendix 1
Public interest entities

The Firm did not issue an audit report for a public interest entity in the year ended 30 September 2015.

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