30 September 2022
This Transparency Report by Buzzacott LLP (“Buzzacott” or “the Firm”) for the year ended 30 September 2022 has been prepared having regard to the Transparency Reporting requirements set out in The Statutory Auditors (Transparency) Instrument 2008. These requirements were drawn from Article 13 of Regulation (EU) No.537/2014 and the amended Directive 2014/56/EU and, following the UK’s exit from the European Union, have been retained as a requirement for audit firms which audit public interest entities (“PIEs”).
The Firm has not issued an audit report on any PIEs during that year and therefore this Transparency Report is not required by UK or EU law. The Firm’s Transparency Report has therefore been prepared having regard to the above requirements (referred to here as “the transparency regulations”) as a framework only.
1. Legal structure and ownership
Buzzacott LLP is a limited liability partnership registered in England and Wales and is owned by its members. As at 30 September 2022, there were 28 individuals who were members. The Firm operates from a single office in London.
The Firm is a member of PrimeGlobal, an association of independent accounting firms, comprised of more than 300 independent public accounting firms in over 100 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 transparency regulations.
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:
|Frequency of Meetings
||Overall management of the Firm and monitoring of performance
||Managing Partner and Executive Partners
|Frequency of Meetings
||Overall strategy of the Firm and major partnership decisions
|Frequency of Meetings
||To recommend Equity Partner remuneration and distribution of equity
||Membership is made up of three elected Equity 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 Chair
|Frequency of Meetings
||Four times per year
|To oversee the relationship with the firm’s auditors and to liaise with the auditors on behalf of the Equity Partners. Specific responsibilities include communicating with the auditors in the role of “those charged with governance” and reporting to the Equity Partners on all matters relating to year end statutory reports and accounts, including the audit of all group entities.
||Membership is made up of three Equity Partners, one of whom is a member of the Executive Committee, with the Managing Partner and Finance Director in attendance.
||Audit Compliance Partner
4. Internal quality control systems
In respect of its audit services, Buzzacott has implemented a number of internal quality control systems to ensure that our high standards are maintained. The Firm keeps an Audit Quality Action Plan to facilitate our aim to maintain and improve audit quality.
The Firm was required to comply with the International Standard on Quality Control (UK) 1; this has recently been replaced by International Standard on Quality Control (UK) 1 and InternationalStandard on Quality Control (UK) 2 from 15 December 2022.
The Firm’s Audit Compliance Principal (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)/Responsible Individual (RI) throughout the audit process, including 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, if any, and audits where such a review is required by laws or regulations.
The manual also sets out the requirements for a second SSA or RI ‘hot review’ of audits of financial statements in certain other circumstances where the risk is elevated. EQCR reviews and hot reviews must be completed and any points raised must be resolved 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 (Mercia). 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 was completed in April 2021. A Practice Assurance review was undertaken by the QAD in May 2022.
6. Independence procedures and ethical requirements
The Financial Reporting Council’s (FRC’s) Ethical Standard provides 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 implemented to counteract those threats.
In respect of its responsibility as the regulatory body for auditors in England and Wales, 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 Ethics Handbook (which all staff must follow) and 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 Principal as described above. In accordance with the Ethical Standard, 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 Mercia.
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 audit appointment, or before engaging to perform an additional service for an audit client, the SSA/RI must consider and approve and document 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.
An internal review of independence practices is included in the Annual Audit Compliance Review which is conducted by Mercia. Buzzacott LLP confirms that the Annual Audit 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 which form part of the firm’s Audit Quality Action Plan.
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 maintain their skills and knowledge and all SSAs/RIs must undertake additional CPD to comply with the International Accounting Education Standards Board’s International Education Standard 8 Professional Competence for Engagement Partners Responsible for Audits of Financial Statements.
Close monitoring of CPD 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 maintain their technical knowledge, professional skills and values at a sufficiently high level.
8. Partner remuneration
Each Equity Partner is subject to a performance review with the Managing Partner and Equity 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.
9. Audit partner and key audit staff rotation
The Firm complies with the audit partner and key audit staff rotation requirements of the FRC’s Ethical Standard.
The Firm’s Audit Compliance Manual sets out the circumstances in which the engagement partner, engagement quality control reviewer and other key partners and staff involved in recurring engagements must be rotated away from a recurring audit engagement.
The Firm monitors the length of time and extent of involvement that partners and staff in senior positions serve as members of the engagement teams for recurring audit engagements.
Where an audit engagement partner has held this role for a continuous period of ten years or more and the FRC’s Ethical Standard or the Firm’s Audit Compliance Manual does not require partner rotation, safeguards are applied to ensure independence is maintained. These safeguards are communicated to those charged with governance of the audited entity.
10. 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 2022 £m (unaudited)
||Year ended 30 September 2021 £m
Statutory audit services provided to:
- public-interest entities*
- other entities
|Non-audit services to audit clients
|Non-audit services to non-audit clients
*Revenues from the statutory audit of annual and consolidated financial statements of public-interest entities and entities belonging to a group of undertakings whose parent undertaking is a public-interest entity.
The Firm’s revenues from non-audit services to audit clients include accounts preparation work for unlisted clients, corporation tax work, tax planning, payroll and other outsourced services and general business advice.
31 January 2023
Public interest entities
The Firm did not carry out a statutory audit for a public-interest entity in the year ended 30 September 2022.
(Note that the Firm did receive revenues in the year from the statutory audit of annual or consolidated financial statements of entities belonging to a group of undertakings whose parent undertaking is a public-interest entity, however the aggregate of these fees is too low to be disclosed in the above table.)
Major local audits
The Firm has not issued any audit reports in respect of major local audits during the year ended 30 September 2022 and therefore the Firm is not required to comply with The Local Auditors (Transparency) Regulations 2020.
30 September 2021
30 September 2020
30 September 2019
30 September 2018
30 September 2017
30 September 2016