Transparency Report 2018
We are pleased to publish our Transparency Report in accordance with EU Audit Regulation 537/2014 Article 13, covering the year ended 30 April 2018. This is our first report under the new regulations, which are effective for accounting periods commencing on or after 17 June 2016.
During the year we have not acted as auditor to any Public Interest Entities, and so this Report has been published on a voluntary basis, rather than being required by the Legislation. Unless we have audit clients which, going forward meet the definition of Public Interest Entities, we do not anticipate continuing to prepare an annual Transparency Report.
Legal structure and ownership
Shipleys LLP ("the Firm") is a limited liability partnership incorporated in England and Wales. At the time of writing there are twelve members ("principals") of the Firm, the nine designated members being its owners.
Six principals are members of the Institute of Chartered Accountants in England & Wales (ICAEW), one is a member of the Institute of Chartered Accountants in Ireland and two are members of the Association of Chartered Certified Accountants.
Both of the Firm's offices provide audit services and there are in total nine Responsible Individuals of the Firm.
The audit practice is regulated by the ICAEW and is subject to review by its Quality Assurance Department (QAD). Were the firm to have clients that meet its criteria, such as clients listed on the main London Stock Exchange, the Firm's audit practice would also be subject to monitoring by the Audit Quality Review team of the Financial Reporting Council (FRC).
Shipleys LLP is a member of AGN International Ltd, a worldwide association of independent accounting and consulting firms. It is not a network as defined by Article 2 of Directive 2006/43/6C and there is no common ownership across the firms. AGN International Ltd has representative members in 80 countries.
The Firm, whose managing principal is Simon Robinson, is governed by its principals, who are responsible for the formulation of the Firm's strategies and policies. Responsibilities are delegated to a small number of Committees, comprising principals and senior staff. These Committees make recommendations and report to the principals at regular meetings. The decision-making process rests with the principals of the Firm.
Internal quality control systems
Responsibility for quality assurance within the Firm rests with the Audit Technical Committee, made up of three Responsible Individuals together with senior staff from both audit offices, chaired by the Audit Compliance Principal. Its main responsibility is to establish, implement and monitor the quality control procedures and policies of the Firm in relation to audit, non-audit and other assurance assignments. The Firm promotes a quality control orientated internal culture at all levels of operation, and ensures compliance with professional standards and regulatory requirements.
The Firm's ethics Principal has overall responsibility for the Firm's policies and procedures relating to integrity, objectivity and independence, compliance with the Financial Reporting Council ethical standards, and effective communication and guidance of these to Principals and staff.
Acceptance and continuance of client relationships
The Firm has established robust engagement acceptance procedures for all of its prospective clients, which are monitored throughout the duration of the client relationship. They include, inter alia, a clear understanding of the client's requirements, our commitment to offering the very best quality of service and an approval process that is appropriate to the perceived risk.
Our HR team, headed by a principal, is responsible for the recruitment, training, appraisal and remuneration processes. Vigorous selection techniques are pivotal to our policies, together with continuing support at all levels for career development and progression.
Engagement performance and monitoring
The audit performance of the Firm is principally monitored by its Audit Technical Committee, which is also responsible for the creation of quality control procedures and policies within the Firm and for training and dissemination of technical information throughout the audit practice. It is also responsible for internal and external reviews and monitoring, including engagement quality control and the provision of a forum for consultation on audit and other assurance engagements.
The Firm makes use of independent external consultants to assist with a compliance review of completed audit files. It is the policy of the Firm that at least one audit file is reviewed for each Responsible Individual within an 18 month period. The reviewed files are scored and the results for reviews undertaken in the year are:
|From||To||% of reviewed files|
During the year the external consultants changed their scoring system from a percentage to a grade (A-D)
Professional skills and values
The Firm is committed to developing and maintaining the highest possible standards for all principals and staff throughout the Firm and it provides an annual programme of Continuing Professional Development, supported by regular internal and external lectures and presentations. A current focus for training is developments in IFRS and FRS 102. Staff and Principals will undertake work commensurate with their professional competence and expertise. The individual professional development needs of each member of staff are assessed as part of their annual performance appraisal.
Statement on the effectiveness of our internal quality control systems
We consider that our internal quality control systems are functioning very well.
As noted above, the Firm is subject to regular external monitoring by the QAD. The last such completed review took place in April 2015, with the result of that review reported to the Audit Registration Committee in September 2015 when the Firm's audit registration was continued. The latest review commenced in June 2018 and is continuing. The firm has not faced any FRC or ICAEW disciplinary proceedings during the year.
The Firm’s financial statements are audited by SRG LLP, Chartered Accountants.
The Firm did not have any listed clients that fell within the remit of the Audit Quality Review of the FRC during the year ended 30 April 2018.
Public interest entities
During the year the Firm did not express an audit opinion on the financial statements of any audit clients which were traded on a regulated market in the European Union.
Independence procedures and practices
The Firm maintains internal policies and procedures to preserve its independence and to act with integrity and objectivity. All Principals and staff are required to complete, firstly upon joining and annually thereafter, statements of independence and confidentiality, as well as confirmation of fit & proper status. Any subsequent changes must be notified to the HR and Ethics Principals when they occur. Any occasions of actual or perceived threat or conflict of independence or any other ethical issues will be documented by the Ethics Principal and a plan for their elimination be formulated and acted upon. Compliance with independence procedures and practices is monitored at all stages of the audit relationship, starting at the point of client acceptance. It is then reassessed during the course of each audit or when client ownership or governance changes occur. There are strict procedures for the rotation of principals who have been acting for audit clients over a prolonged period, as required by the ethical standards. There is mandatory Audit Engagement partner rotation after 5 years for audits of public interest and other listed clients. For all other clients, consideration of the need to rotate after 10 years is made through discussion with the Ethics Partner. Independent partner reviews are undertaken if rotation is not considered necessary.
There are also detailed procedures for the provision of non-audit services to audit clients.
Compliance with our independence procedures is ongoing throughout the year. In addition, an internal review of independence practices within the Firm is carried out annually.
|From statutory audit work|
|- of public interest entities||-||39,015|
|- of group undertakings of public interest entities||68,730||85,464|
|- of other audit clients||3,088,084||3,027,970|
|From non-audit services to audit clients||1,314,121||1,322,501|
|From non-audit services to non audit clients||8,512,483||8,335,139|
The 2018 figures have yet to be audited.
Non audit services include accounting, tax compliance and advice, business planning, corporate finance and transaction support, payroll and company secretarial matters. A minor amount of corporate recovery insolvency work is also included in the above non audit figures which has arisen on a run off basis. This service ceased to be offered to new clients prior to 30 April 2015.
Remuneration of Principals
Profits are shared in accordance with the Members' Agreement and are determined following a performance review and assessment at a meeting of the designated members. Performance assessment includes delivery of an outstanding service to clients, technical excellence, quality and risk management, staff development and the overall contribution made to the financial success and reputation of the Firm.
Audit Principals are not remunerated by reference to the selling of non-audit services to audit clients.
London, July 2018