Transparency Statement 2020

PKF Littlejohn LLP Transparency Report 2020

We are pleased to present our Transparency Report for the year ended 31 May 2020 designed to give information on the ownership and governance of the firm and the measures we take to maintain independence and high-quality standards in our audit and other services.

Legal structure and ownership

PKF Littlejohn LLP is a limited liability partnership governed by the terms of its Members’ Agreement and is owned by its equity partners. As at 31 May 2020 there were 14 full equity and 17 fixed equity partners

The firm operates from its offices at 15 Westferry Circus, Canary Wharf, London E14 4HD and One Park Row, Leeds, LS1 5HN. We offer a range of services comprising business advice, audit, accountancy, internal audit, taxation (corporate and personal), corporate finance, IT consultancy, litigation support, business recovery, turnaround and insolvency services. In addition, through its partnering arrangements with Capitalise (www.capitalise.com) and Escalate (www.escalatedisputes.co.uk), the firm offers funding solutions and dispute resolution services for SMEs.

We have three principal active subsidiary companies:

  • PKF Geoffrey Martin & Co Limited which specialises solely in business recovery, turnaround, fraud investigation and insolvency services.
  • PKF Littlejohn Payroll Services Limited provides outsourced payroll services using Payroll Service Company as the provider of payroll services.
  • PKF Littlejohn Business Solutions Limited which provides funding solutions.

PKF International Network

Introduction

The firm is a member firm of the PKF International (PKFI) family of legally independent firms. The PKF Network consists of members firms in locations around the world, providing assurance, accounting,  business advisory and taxation services. PKFI is a member of the Forum of Firms – an organisation dedicated to consistent and high-quality standards of financial reporting and auditing practices worldwide.

PKFI administers a family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of any individual members or correspondent firm or firms. 

Legal basis

The network formed by PKFI (the Licensor or the Company) and the member firms (the Licensees) is regulated by adherence to an Operating Licence Agreement (OLA) between the Licensor and individual Licensees. The OLA authorises the Licensee to use the PKF name as defined under specific circumstances, under specific conditions, for specific purposes and in a specific territory, in consideration for which the Licensee pays a licence fee to the Licensor. 

The Licensor is a private company registered in England and limited by guarantee. The Company’s Articles of Association require a Board of Directors who conduct the business of the Company. The Board has a strategic and co-ordinating role but has no executive authority of the operations of individual member firms.

Each Licensee is a legally independent entity owned and managed in each location. Contractual relations are only formed between a client and the member firm engaged by the client and no other member firm may be held liable. The Company has no financial or management interest in any member firm. None of the directors of the Company has a financial or management interest in any member firm other than his or her own.

Structure

Members firms are organised into five geographical regions. Each region has a regional board and elects or nominates representatives to the Company’s Board of Directors.

There are two international committees responsible for professional and practice standards – the International Professional Standards Committee (incl. Assurance) (IPSC) and International Tax Committee (ITC). A number of additional practice area committees operate both regionally and internationally.

Quality assurance

PKFI operates a global monitoring programme covering member firms. The principal objectives are to ensure that the standards expected for the performance of certain types of professional work by member firms are established and communicated to firms, that those standards meet appropriate recognised professional practice requirements at least for transnational and referred work, and that a programme of monitoring of compliance with expected standards is operating effectively.

Member firms, countries and turnover

PKFI distinguishes between member firms and exclusive / non-exclusive correspondent firms. Correspondent firms do not form part of the Network as defined by the Code of Ethics for Professional Accountants, including International Independence Standards issued by the International Ethics Standards Board for Accountants (IESBA), have none of the rights and privileges of member firms and are not covered by the GMP An up to date list of member and correspondent firms, including the firm names and countries in which they are registered and operate from, can be found on the website www.pkf.com.

The aggregate fee income which relates to the statutory audit of annual and consolidated financial statements for EU EEA members firms (excluding correspondent firms) that belong to the PKFI network, (as set out in Appendix 1), as reported in the Firm Compliance Reporting ending 30 June 2019, is US$121.45 million.

PKF Littlejohn management

The firm is managed by a board, concentrating on strategic matters and reporting and accountable to the partnership as a whole. The current board comprises a Managing Partner and Chairman who are elected by the partners and further partners appointed by the Managing Partner from time to time as well as two independent non-executive board members appointed by the board.

As at 31 May 2020 the board comprised:

  • Dominic Roberts  (Managing Partner)
  • Mark Ling (Chairman)
  • Neil Coulson
  • John Wallace (Independent Non-Executive board member)
    Andrew Shepherd (Independent Non- Executive board member – appointed 1 December 2019)

Biographical details for the members of the board are provided in Appendix 2.

The day to day running of the firm is handled by the leadership team which is appointed by the Managing Partner. The membership of the leadership team consists of Partners and Directors who assist the Managing Partner in carrying out his business on a Firm wide level. Its remit covers the operation of the whole Firm and is not limited to the audit practice. The work performed by the leadership team is overseen by the board.

In accordance with the Firm’s Board Governance Principles the board evaluates its own processes and performance including the work of its committees annually to ensure its ongoing effectiveness. The board also monitors the decisions and actions and performance of the firm’s management (i.e. Managing Partner and Leadership team) including compliance with the Audit Firm Governance Code.

The performance of the Managing Partner, Chairman and other executive members of the board is reviewed annually, and all such reviews involve one or more of the INEs whilst the performance of the INEs is reviewed by the Chairman.

The Chairman and partner member of the board are elected by the Partners for terms of 2 years whilst the other board members including the Managing Partner are elected or, in the case of INEs selected, for terms of 3 years with a limitation on the number of consecutive terms.

The Managing Partner has the authority to establish any policy, make any decision, enter into any obligation, take any action and develop any activity that will achieve the PKF LJN Goal across both the Audit and non-Audit business provided that these are within a reasonable interpretation of the Reserved Matters Schedule (as amended from time to time). This authority is established within the firms Board Governance Principles.

All MP and LT actions and decisions are carried out in accordance with commonly accepted business practice and professional ethics and within the Reserved Matters Schedule.  The Board may at any time change the authority of the MP and LT and in particular, may change the PKF LJN Goal and the Reserved Matters Schedule other than those items reserved for Partners within the Partnership Deed. The Board respect and support the MP’s and LT’s decisions and judgement within the proper exercise of their authority.

Key Performance Indicators (KPIs) to monitor the performance of the governance system of the Firm are set by the Board. The KPIs are reviewed by the Board and any variances from the expected performance are investigated and any necessary actions taken. Attendance at Board meetings by the members of the Board was identified as a KPI for the governance system in the year to 31 May 2020. Details of the attendance by the members of the Board are provided in Appendix 2.

The Board maintain and review the firm’s register of risks which threaten its business model, future performance, solvency or liquidity or the sustainability of the Firm. Matters to be included in the register are identified by the board and by all other aspects of the governance structure all of whom have reporting lines to the board In addition the board discuss at each meeting matters in relation to expectations for the conduct of the firm’s business and its employees as represented by the firm’s values and Code of Conduct

Partner remuneration

Fixed and full equity partners receive a fixed share of the profits as a first charge on the overall profits of the firm. The second charge on the firm’s profit is the award of bonuses both to fixed and full equity partners. The amount of any bonus awarded is assessed by the leadership team, moderated by a remuneration committee appointed by the partners and ultimately approved by the equity partners. The remuneration committee consulted on their recommendations with Andrew Shepherd (one of the INEs) before submitting for equity partner approval. Any residual profit is then allocated to the full equity partners based on their profit share. The fixed share of profits and the full equity partners profit shares are reviewed on a regular basis (normally every two years) by the remuneration committee. The assessment takes into account partners’ performance assessed against criteria covering client service, technical performance, technical ability, working capital management and management responsibilities.

The weighting attributed to these factors varies according to the circumstances of individual partners and the needs of the firm determined by management from time to time.

Two of the five areas captured in the assessment of an audit partner’s performance are focused on achieving audit quality. Audit partners are not incentivised to gain non-audit work from audit clients. 

Financial information (Group)

The following information has been extracted from the unaudited financial statements for the year ended 31 May 2020, demonstrating the importance of statutory audit work to the overall results of the Firm.

Year ended
31 May 2020
(£m) unaudited
Year ended
31 May 2019
(£m) audited
Year ended
31 May 2018
(£m) audited
Statutory audit fees of Public Interest Entities (PIEs) 0.9 0.7 0.6
Statutory audit fees of other audit clients 11.7 11.2 9.9
Fees for non-audit services to audit clients 5.1 4.2 5.5
Fees for non-audit services to non-audit clients 15.8 16.0 11.1
Total revenue 33.5 32.1 27.1

The Firm achieved a strong set of financial results for the year ended 31 May 2020 despite the challenging COVID-19 situation in the second half of the year. The Board remain cautiously optimistic about the strength and resilience of the Firm’s business model over the coming year.

A list of the Public Interest Entities in respect of which PKF Littlejohn LLP issued a statutory audit opinion in the year ended 31 May 2020 is set out in Appendix 3..

Quality control system

PKF Littlejohn LLP has established a quality control system that encompasses the six elements of quality control embedded within International Standard on Quality Control (UK) 1 (ISQC1), which deals with a firm’s responsibilities for systems of quality control for audits and reviews of financial statements and other assurance and related engagements.

The elements of quality control set out in ISQC (UK) 1 have relevance to all services provided by the firm and the firm has applied them as follows:

Leadership responsibilities

Responsibility for the effective operation of the quality control system lies with the Managing Partner who is accountable to the board and the partnership as a whole.

Professional standards and procedures are set by our Professional Standards Committee (PSC), reporting to the Managing Partner. To avoid the possibility of management override, the PSC has whistle blowing responsibilities both to the board and the overall partnership. The firm has also appointed audit, ethics, money laundering, investment business and practice assurance partners who report directly to the Managing Partner but who also report to the PSC as appropriate on the firm’s compliance with those areas which they are responsible for.

The PSC operates primarily by publishing internal Professional Standard Notes (PSNs), which set out the standards that the firm must meet in order to comply with ISQC (UK) 1 and other professional standards. The PSC also monitors compliance and receives reports from the monitoring of quality (see below) and makes recommendations for improvement to the Managing Partner. Responsibility for implementing the firm’s professional standards lies with the leadership team

Independent Non-Executives

The Independent Non-Executive Board members are independent from the Firm and its Members and are initially appointed to serve a term of three years and may serve for one further consecutive term if re-appointed.  The INEs comply with the policies and procedures of PKF LJN and their duties are set out in a formal contract and job specification.

Non-Executive Board members (INEDs) are paid a fee determined by the Board.

The firm’s INEs are responsible for the oversight of the Firm’s policies and processes and in particular those related to:

  • Promoting audit quality;
  • Helping the Firm secure its reputation more broadly, including in our non-audit businesses; and
  • Reducing the risk of firm failure.

Reviews conducted by the INEs are designed to cover all material controls, including financial, operational and compliance controls and risk management systems as well as the promotion of an appropriate culture underpinned by sound values and behaviour within the Firm.

In order to perform this role, in addition to attending Board and Partner meetings, the INEs have the right of access to relevant information and people within the Firm. The INEs have regular contact with the Ethics Partner and the Professional Standards Committee including involvement in scheduled and ad hoc meetings. The INEs play a part in reviewing the effectiveness of the Firm’s systems of internal control and as such are members of the Firm’s Audit Committee.

The firm has in place policies and procedures for managing its partners and staff which support its commitment to the professionalism, openness and risk management principles set out in the Code,  In order to review these people management policies and procedures as they apply to the staff the INEs interact with the Human Resources Department. For partners, the INEs also review the recommendations made by the Firm’s Remuneration Committee.

As Independent members of the board the INEs provide a truly independent channel of communication for all partners and members of staff and as such are responsible for the whistleblowing process and are the first port of call for any whistle-blowers.

The Board Governance Principles state that the Board should be of a size which enables the full engagements of all the Board members and of minimum of five members including the INEs. In light of the size of the Firm and the number of public company audits undertaken the Board consider that it is appropriate to have  two INEs as members of the Board. The Audit Firm Governance Code suggests a minimum of three INEs, a third appointment will be made when the Firm has been appointed as statutory auditor for an appropriate number and size of public company clients. This is reviewed on a regular basis by the Board.

INEs are initially appointed to serve a term of three years and may serve for one further consecutive term if re-appointed. At all times, the INEs will be independent from the Firm and its Members and must comply with the policies and procedures of the Firm. The appointment terms, duties and rights of Independent Non-Executive Directors are set out in a formal contract for services.

Report of the Independent Non-Executives

 The INEs responsibilities are aligned with the principal objectives of the Audit Firm Governance Code. These are

  • to help promote audit quality
  • to help the Firm secure its reputation more broadly, including its non-audit business; and
  • to help reduce the risk of firm failure.

To enable us to meet our responsibilities we have been granted rights of access to relevant information and people within the Firm. We have met regularly with relevant partners including the Ethics Partner, Chair of the Professional Standards Committee (PSC), Head of Audit, the Board and in addition other partners, service directors and staff.  These meetings have enabled us to gain sufficient understanding to allow us to undertake our oversight.

As INEs we have attended the firm’s Board and Partner meetings which together provide the opportunity to observe, understand and where required, to independently challenge, aspects of the firm’s operation.

There is a protocol available to deal with any fundamental disagreement which arises between the INEs and the executive although no such event has occurred in this period.

Audit Quality

We hold regular meetings with the Chair of the PSC and the Technical and Training Director to understand any issues that have arisen in all quality monitoring reviews, to review reports of any ethical issues and to oversee the actions implemented and adherence to ongoing training on technical and compliance matters.

Our regular attendance at Board meetings has allowed us to observe the leadership tone and the Board’s implementation of its strategy of striving for quality at all levels.

Reputation
 
The Board and the Firm place considerable importance in reducing any reputational risk. We have sought to oversee the mitigation of this risk through the Firm’s Risk Register.

To be aware of any issues that may effect the Firm’s reputation we have reviewed reports from the Ethics Partner and the Chair of the PSC relating to ethical matters, litigation and claims, reputational matters and whistleblowing.

As INEs we have ensured that the Firm has an effective whistleblowing process in place, and we manage the Firm’s dedicated whistleblowing communications channel.

Risk of Failure

We have had regular contact and been able to raise queries with the CFO and have overseen the budgeting process and setting of assumptions. We have received and reviewed management accounts and have been involved in related discussions during board meetings. We have also been engaged in the process of briefing the firm’s auditors and attended the post audit review.
 
The Firm recognises the importance of nurturing its staff without whom the Firm is at risk.  We have observed the Board developing and enacting the Firm’s strategies for recruitment and retention including leading the culture of treating its people well. We have also received reports from the Remuneration Committee and observed related discussions.

 With the Board we have reviewed the firm’s register of risks which threaten its business model, future performance, solvency or liquidity or the sustainability of the Firm. We have also observed board discussions in relation to expectations for the conduct of the firm’s business and its employees as represented by the firm’s values and Code of Conduct.
 
Conclusion to the report of the Independent Non-Executives

We believe that we have been able to satisfy ourselves that the management of the firm is focused on audit quality, safeguarding its reputation and building a better firm.

Ethical requirements

The requirement to comply with the ICAEW’s Code of Ethics, the Financial Reporting Council (FRC) Revised Ethical Standard 2019 and, as the firm is a member of the PKF network and Forum of Firms, the IESBA Code of Ethics is set out in the firm’s PSNs.

The requirement to comply with the Bribery Act 2010 and the firm’s PSNs are set out in the staff handbook and form part of the employees’ contracts of employment. The requirements for the partners to comply are contained in the Members’ Agreement.

The firm’s PSNs, which also cover independence requirements, set out the following:

  • Adherence to the ICAEW’s Code of Ethics, FRC Revised Ethical Standard and IESBA Code of Ethics takes precedence over commercial considerations.
  • Before accepting any new work assignments from either new or existing clients, partners and staff must take reasonable steps to identify circumstances that could pose a conflict of interest both within the firm and the PKF network.
  • Conflict of interest checks within the PKF network must include a review of the PKFI Transnational Entities database to establish if any network firm has an existing relationship with the new or existing client.
  • Partners and managers are required to keep independence issues under constant review and, in respect of audit assignments, reconfirm the firm’s independence having regard to FRC’s Revised Ethical Standard, prior to the commencement of every audit.
  • All members of the firm are required to complete an annual declaration of their independence, and freedom from conflicts of interest and prohibited investments.
  • The Ethics Partner completes an annual review of the annual declarations for independence compliance.
  • Gifts and hospitality can only be accepted or offered where an objective, reasonable and informed third party would consider, or perceive, the value to be trivial or inconsequential.
  • The Ethics Partner must be consulted on all questions related to independence and professional ethics. The decision of the Ethics Partner on each matter is final.
  • Instances of non-compliance with or breaches of the firm’s procedures must be reported to the Ethics Partner.
  •  The firm’s policy on the rotation of key audit partners and staff is set out in a specific PSN. All partners and staff involved in a PIE audit must follow the firm’s rotation policies which have been established in line with the underlying ethical and legal requirements relevant to the firm. In summary these policies are: 
    •  The partner responsible for the audit must cease their participation in that audit no later than five years from that date of their appointment. Where the audit committee of the entity (or equivalent) request an extension to this, the Firm’s Ethics Partner may grant an extension for up to two years.

Acceptance and continuance of client relationships and specific engagements

The firm has detailed procedures covering the acceptance and continuance of client relationships and new specific engagements. A comprehensive client acceptance form must be completed prior to acceptance of every appointment. This requires identification of the prospective client, an assessment of our independence, integrity and objectivity, freedom from conflicts of interest, an assessment of whether the firm has the requisite skills to carry out the engagement and an assessment of the risk the prospective client would present to the firm.

Conflict of interest checks are completed prior to a proposal to a potential new client or before agreement for the provision of a new service to an existing client. The checks include a consideration of whether the entity is a transnational entity, a public interest entity or a listed entity. Transnational entities are those entities whose financial statements may be relied upon outside the audited entity’s home jurisdiction for the purposes of significant lending, investment or regulatory decisions. A database of such entities is maintained by PKFI to enable identification of those entities where another network member firm provides services to that entity.

Upon acceptance of a new client or a specific engagement from an existing client, the firm issues a detailed engagement letter for agreement by the client, setting out, inter alia, our understanding of the nature of the assignment and what is required of us and our standard terms of business.

In addition to the above, partners and staff involved in audit engagements, including statutory audits of PIEs, must separately complete a client acceptance of (re)appointment form before any work commences to ensure compliance with the requirements of the FRC’s Revised Ethical Standard.

All personnel are required to monitor the Prohibited Investments list maintained by the firm to ensure that they do not hold an interest in a client of the firm.

Human resources

The firm has established policies and procedures to ensure that partners and staff are equipped with the required technical skills and reflect the firm’s values of commitment to client service and high professional and ethical standards, covering objectivity, integrity and independence.

The firm sets high standards for the recruitment and promotion of personnel, in particular with regard to the selection and interview of candidates and the qualifications including relevant experience as required. Partners are involved in all interviews and references are always taken, including verification of membership of professional or regulatory bodies.

All personnel undergo regular appraisals dealing with past performance, future development and training needs as aligned to the relevant competency framework. Audit staff receive performance appraisals at the end of each significant assignment, which includes the assessment of the achievement of audit quality, and this is fed into their six-monthly appraisals.

The firm adheres to the requirements of the ICAEW for continuing professional development (CPD). Responsibility for providing full support for the development needs of individuals lies with the leadership team.

The training programme is informed by new technical developments, the identification of training needs through appraisals, the firm’s quality control system and a review of CPD records maintained by staff.

The firm provides:

  • Dedicated technical support staff
  • A technical library, including online resources available via the firm’s intranet
  • Manuals setting out the firm’s procedures for all audit and assurance engagements as well as other services provided by the firm
  • Membership of the Faculties and Special Interest Groups of the ICAEW and dissemination of their guidance and bulletins to audit partners and staff
  • Subscription to the email update service of the Financial Reporting Council, enabling early access, inter alia, to its output pertaining to audit and accounting, which is disseminated to audit partners and staff
  • Regular internally and externally provided update training for partners and staff dealing with current developments in accounting, auditing, ethical standards and tax
  • Internal training courses tailored to the specific roles of individuals at each stage of their careers (e.g. audit assignment leaders course and Director Responsible Individual training)
  • Ad hoc internal and external training to meet specific needs.

Details of the mandatory training for relevant staff are as follows:

  • Accounting updates
  • Audit updates
  • Tax updates
  • Ethics updates
  • Anti-money laundering
  • Anti-bribery and corruption training
  • GDPR training
  • Pathway – a portfolio of management skills training
  • Other technical based training as appropriate for specific partners and members of staff

The firm is an accredited training office with the ICAEW, the Association of Certified Chartered Accountants and the Association of Accounting Technicians. The progress of students studying for their professional qualifications with these and other bodies (for example, the Chartered Institute of Taxation) is carefully monitored, with each student being closely supported.

The firm is committed to the highest standards of openness, probity and accountability and encourages members of staff who have genuine concerns about any form of malpractice in the firm to raise those concerns. This whistleblowing policy applies to all partners, employees, agency workers and self-employed contractors.

Engagement performance

The firm’s procedures for engagements are set out in professional standards notes developed by the firm. In respect of audit and assurance engagements, the firm uses proprietary audit programmes which have been developed with the firm’s own programmes for specialist audits, including the statutory audits of PIEs.

All professional work is subject to review by managers, directors and partners, with clear guidelines laid down for second partner consultation, engagement quality control reviews, consultation with the compliance partners and the use of external experts where required.

Monitoring

Internal quality control

The firm engages external reviewers to monitor the quality of audit, assurance and tax work, as well as other services provided by the firm. Reviews take place eight times per annum with reports delivered to the PSC and the Audit Compliance Partner. Our external reviewers also carry out an annual whole firm practice assurance review.

The reviews of the firm’s audit work are performed to ensure the firm is compliant with the requirements of ISQC (UK) 1. The review period for the firm has been changed to bring it in line with the firm’s financial year end. In the eleven-month period ended 31 May 2020, overall, the firm achieved it’s average benchmark of 85% or above.

External quality control

PKF Littlejohn LLP is a Registered Auditor and is regulated in the conduct of its services by the Financial Reporting Council and the Institute of Chartered Accountants in England & Wales (ICAEW), including as a Designated Professional Body for investment business. The firm is registered with the Isle of Man Financial Services Authority and the Jersey Financial Services Commission to undertake audit work in connection with market traded companies incorporated in the Isle of Man and Jersey respectively. The firm is also registered with the Public Company Accounting Oversight Board and the Canadian Public Accountability Board to undertake audit work in connection with US and Canadian listed entities respectively.

As a statutory auditor of entities defined as public interest entities, the firm is subject to monitoring by the Audit Quality Review Team (AQR) of the Financial Reporting Council. The AQR reviewed the firm in November 2017, the final report was received in August 2018. The firm addressed the findings by 31 December 2018.

The firm is also subject to periodic audit and practice assurance reviews by the Quality Assurance Department (QAD) of the ICAEW with full and limited audit assurance reviews on alternate years. The QAD carried out a full audit monitoring visit and a whole firm practice assurance review in 2017 and a limited audit assurance review in November 2018. The next full audit monitoring visit is due in November 2019.

The European Court of Auditor also reviews the firm’s work on those services provided to the European Union or its institutions.

As a member of the PKF network, the firm is also subject to periodic reviews by the PKF International. The last review was performed in August 2019.

The results of all internal and external quality control reviews are used to inform improvements to the firm’s policies and procedures and are also fed into the firm’s internal training programme. Where appropriate and considered necessary, the PSC will issue Quality Control Monitoring Alerts to bring to the attention of partners and staff any matters that need to be addressed.

Directors and associates of PKF Geoffrey Martin & Co Limited who act as insolvency practitioners are individually authorised and regulated either by the Insolvency Practitioners Association or the ICAEW, both bodies are recognised by the Insolvency Service (an executive agency sponsored by the Department for Business, Energy and Industrial Strategy), which is the ultimate regulator of the insolvency profession. Practitioners are typically inspected on a cyclical basis. Practitioners who are Directors and associates or PKF Geoffrey Martin & Co Limited were last inspected in 2017.

Statement of effectiveness

Based on the results of the monitoring as referred to above, the firm is satisfied that its quality control system is operating effectively to ensure that the firm complies with all professional standards and delivers a quality service to clients.

Dominic Roberts
Managing Partner
For and on behalf of PKF Littlejohn LLP

30 September 2020

 

The appendices which follow, and form part of this transparency report are:

Appendix 1 – PKF International member and correspondent firms providing statutory audit services within the European Union
Appendix 2 – Biographical details for the members of the board 
Appendix 3 – List of Public Interest Entities in respect of which PKF Littlejohn LLP issued a statutory audit opinion in the year ended 31 May 2020
Appendix 4 –  Audit Firm Governance code statement of compliance

 

Appendix 1

PKF International member and correspondent firms providing statutory audit services within the European Union.

Registered name Country Head office city
PKF Corti & Partner GmbH Wirtschaftsprüfer und Steuerberater Austria Graz
PKF Österreicher – Staribacher Wirtschaftsprüfungs GmbH & Co KG Austria Vienna
PKF Centurion Wirtschaftsprüfungsgesellschaft mbH Austria Vienna
PKF Rößlhuber & Partner Steuerberatungs GmbH & Co KG Austria Salzburg
PKF-VMB Bedrijfsrevisoren cvba Belgium Antwerp
PKF Bulgaria Ltd. Bulgaria Sofia
PKF Croatia Croatia Zagreb
PKF ATCO Limited Cyprus Nicosia
PKF Savvides & Co Ltd Cyprus Limassol
APOGEO Group, SE Czech Republic Prague
PKF Munkebo Vindelev, Statsautoriseret Revisionsaktieselskab Denmark Copenhagen – Glostrup
PKF Estonia OÜ Estonia Tallinn
Cabinet GROSS-HUGEL France Strasbourg
Cogeparc S.A. France Lyon
PKF Audit Conseil France Marseille
PKF Fasselt Schlage Partnerschaft mbB Berlin Germany Berlin
PKF Industrie- und Verkehrstreuhand GmbH Wirtschaftsprüfungsgesellschaft Germany Munich
PKF Issing Faulhaber Wozar Altenbeck GmbH & Co. KG Germany Würzburg
PKF Riedel Appel Hornig GmbH Germany Heidelberg
PKF Sozietät Dr. Fischer Germany Nuremberg
PKF VOGT & PARTNER Wirtschaftsprüfer Steuerberater Germany Herford
PKF WMS Bruns-Coppenrath & Partner mbB Wirtschaftsprüfungsgesellschaft Steuerberater Rechtsanwälte Germany Osnabrück
PKF WULF & PARTNER Partnerschaft mbB Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft Germany Stuttgart
PKF Euroauditing S.A. Greece Athens
PKF Audit Kft Hungary Budapest
PKF O’Connor, Leddy & Holmes Limited Ireland Dublin
PKF-FPM Partnership Ireland Co. Louth
Associazione Professionale Studio Maurizio Godoli Italy Bologne
PKF Italia S.p.A. Italy Milan
PKF Studio TCL – Tax Consulting Legal Italy Genoa
PKF Latvia SIA Latvia Marupe
L’Alliance Révision S.à.r.l. Luxembourg Luxembourg City
PKF Audit & Conseil S.à.r.l. Luxembourg Luxembourg
PKF Malta Malta Birkirkara
PKF Wallast Netherlands Delft
PKF Beckman Lundevall Revisjon AS Norway Oslo
PKF Consult Spółka z ograniczoną odpowiedzialnością Sp. k. Poland Warsaw
PKF II Portugal Lda Portugal Lisbon
PKF Econometrica S. R. L. Romania Timisoara
PKF Finconta S. R. L. Romania Bucharest
PKF Slovensko S.R.O Slovakia Previdza
PKF – Audiec SAP Spain Barcelona
PKF ATTEST Spain Madrid
PKF Revidentia AB Sweden Stockholm
PKF Cooper Parry Group Limited* United Kingdom Central England
PKF-FPM Accountants United Kingdom Co. Down
Francis Clark LLP United Kingdom Exter
Johnston Carmichael LLP United Kingdom Aberdeen
KLSA LLP United Kingdom Harrow
PKF Littlejohn United Kingdom London

 

Appendix 2

Brief details for the members of the board:

Dominic Roberts – Managing Partner, appointed 1 June 2019

Dominic, together with his colleagues on our three-person Leadership Team is responsible for setting the business’ objectives, developing and monitoring our strategic direction, and driving our continued growth. Dominic also plays an active role in ensuring that PKF remains at the forefront of promoting the wellbeing of our people.

Dominic made his name as a transaction services and audit specialist in our Capital Markets team where his portfolio has included clients listed on the LSE, AIM, NASDAQ, AQUIS, TSX and ASX stock exchanges.  During Dominic’s time as Head of Capital Markets, the team expanded rapidly to become the seventh largest auditor of listed companies, according to the respected ARL Adviser Rankings guide.

Dominic is also a member of the board of PKF International, ensuring that the network remains ideally positioned to serve aspirational clients with multinational operations.

Mark Ling – Chairman

Mark has acted as an audit partner for a wide range of different retail businesses such as: a retail group with a turnover of £1.4 billion generated by 160,000 active lines; a US online digital brand clothing retailer with challenges around sourcing, logistics and advanced IT systems; a €1.4 billion global mobile communication group that is ranked in the top 50 mid-market non-quoted companies in the UK; and a US-listed retailer of liquor where marketing is a key driver in a crowded marketplace.

A common theme of Mark’s clients is their reliance on a complex technology platform that records many transactions per day. This long exposure to cutting-edge management systems has honed Mark’s belief that an effective audit approach must include understanding and harnessing the client’s IT systems rather than working around them.

Mark heads up PKF UK’s Capital Markets group. The team deals with large and complex audits, many of which are quoted on various world equity markets together with entities where there is a significant external shareholder element.

Neil Coulson – Partner

Neil has specialised in the insurance market for more than 35 years and is the technical lead for insurance matters at PKF.  His experience includes the external audit of insurance companies and Lloyd’s syndicates.  He also has extensive experience auditing most types of general insurance business ranging from personal lines to reinsurance. 

Additionally, Neil provides internal audit services to the insurance market, including governance, underwriting, pricing, delegated underwriting, reinsurance, claims, reserving, compliance, planning, exposure and risk management, data, IT, HR, tax, finance functions and Solvency II.  As an active member of the ICAEW insurance committee, he has participated in several working parties dealing with issues such as Solvency II and IFRS 17.  He has also been involved in various Lloyd’s and regulatory working parties over the years. 

Neil is also a member of the firm’s Professional Standards Committee (PSC).

Andrew Shepherd – Independent Non-Executive 

Andrew has considerable experience in the governance of a professional accountancy practice having been a Partner and Chairman of Johnston Carmichael LLP, the Scottish PKF member firm of Chartered Accountants, for 26 and 9 years respectively. Andrew chairs the Audit Committee.

Andrew holds other non-executive roles which draw on his knowledge of large, primarily family owned, corporates.

Andrew was appointed as an INE on 1 December 2019

John Wallace – Independent Non-Executive 

John brings a broad experience in business strategy, governance, business process and IT, including information security. He is also a passionate advocate for the creation of strong, values led ‘Growth Mindset’ cultures as a key driver of sustainable quality and growth.

Alongside his role at PKF John is the founder and CEO of a UK based software company and his specialities include financial process automation including robotic process automation, data analytics and AI. 

Board meetings held during the year

The board held four formal meetings during the year in July, September, December and April.

Name Position Meetings attended % attended
Dominic Roberts Managing Partner 3 75%
Mark Ling Chairman 4 100%
Neil Coulson Partner 3 75%
John Wallace Independent Non-Executive 4 100%
Andrew Shepherd Independent Non-Executive 2 100%

Attendance at Board meetings by the members of the Board was set as a KPI for the governance system in the year to 31 May 2020. There were no variances from the expected performance to be investigated by the Board.

Appendix 3

Public Interest Entities in respect of which PKF Littlejohn LLP issued a statutory audit opinion in the year ended 31 May 2020 were as follows:

  • Alpha Growth Plc
  • Argo Blockchain Plc
  • Azure Finance No. 1 Plc
  • BSF Enterprise Plc
  • Chesterfield Resources Plc
  • Dev Clever Holdings Plc
  • Dukemount Capital Plc
  • HDL Debenture Limited
  • Hemogenyx Pharmaceuticals Plc
  • Kavango Resources Plc
  • Irwell Insurance Company Limited
  • Investment Company Plc (The)
  • London Finance & Investment Group Plc
  • Mila Resources Plc
  • Path Investments Plc
  • PAMIA Limited
  • R&Q Eta Company Limited
  • R&Q Gamma Company Limited
  • Rockpool Acquisitions Plc
  • Spinnaker Opportunities Plc
  • Sure Ventures Plc
  • Toople Plc
  • Tradex Insurance Company Limited
  • Trident Resources Plc
  • Zoetic International Plc

 

Appendix 4

Audit Firm Governance code statement of compliance

In accordance with the Audit Firm Governance Code 2016 (“the code”) principle E.2: Governance Reporting we make the following statement with regards to the application in practice of each of the principles of the Code on which we are required to report.

Requirement Section reference
A Leadership
A.1.2 The firm should state in its transparency report how its governance structures and management operate, their duties and the types of decisions they take. In doing so the firm should explain how its governance structure provides oversight of both the audit practice and the firm as a whole with a focus on ensuring the Code’s purpose, is achieved. If the management and/or governance of the firm rests at an international level it should specifically set out how management and oversight of audit, is undertaken and the Code’s purpose achieved in the UK. PKF Littlejohn Management
A.1.3 The firm should state in its transparency report the names and job titles of all members of the firm’s governance structures and its management, how they are elected or appointed and their terms, length of service, meeting attendance in the year, and relevant biographical details. PKF Littlejohn Management & Appendix 3
B Values
B.1.2 Firms should introduce KPIs on the performance of their governance system, and report on performance against these in their transparency reports. PKF Littlejohn Management
C Independent non-executives
C.2.1 The firm should state in its transparency report its criteria for  assessing the impact of independent non-executives on the firm’s independence as auditors and their independence from the firm and its owners. Independent Non-Executives
D Operations
D.1.3 The firm should state in its transparency report how it applies policies and procedures for managing potential and actual conflicts of interest. Acceptance and continuance of client relationships and specific engagements
D.2.2 The firm should state in its transparency report that it has performed a review of the effectiveness 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. Internal quality control
E Reporting
E.2.2 In its transparency report the firm should give details of any additional provisions from the UK Corporate Governance Code which it has adopted within its own governance structure. No additional provisions have been adopted by the Firm
E.3.1 The firm should confirm that it has carried out a robust assessment of the principal risks facing the audit firm, including those that would threaten its business model, future performance, solvency or liquidity. The firm should describe those risks and explain how they are being managed or mitigated. PKF Littlejohn Management & Report of the INEs

 

 

Click here to see our 2019 Transparency Statement2018 Transparency Statement, our 2017 Transparency Statement, and our 2016 Transparency Statement.