Transparency statement 2015

Clement Keys – Transparency Report 2015
Clement Keys LLP is pleased to present its Transparency Report for the financial year ending 31 March 2015. This statement is prepared in compliance with The Statutory Auditors (Transparency) Instrument 2008 and is designed to give background information on the firm and the practices adopted to ensure the maintenance of high quality standards in our audit services.

Legal structure and ownership of the firm

Clement Keys LLP (“the firm”) is a limited liability partnership governed by the terms of its Members’ Agreement and is registered in England and Wales with registered number OC371644. It is owned by its equity members. For the period to 31 March 2015 there were 5 full equity members and 2 salaried members. Members are commonly referred to as partners.

Clement Keys LLP operates from an office at No. 8 Calthorpe Road, Edgbaston, Birmingham, B15 1QT in the UK, has no other related firms in the UK and has no branches outside of the UK. Its principal service lines are accountancy, audit, business advisory, corporate finance, and taxation (corporate and personal) services.

Network arrangements

Clement Keys LLP is not a member of a network but it is a member of PrimeGlobal, a worldwide association of independent firms offering a range of professional services including auditing and accounting, taxation and business consulting.

Governance Structure of the firm

The partners meet on a monthly basis to discuss operational issues, financial affairs and staffing matters. In addition, three half-day partners’ meetings, which all partners attend, and a full day offsite conference is held each year to discuss the long term strategy of the firm.

On an annual basis the partners decide on a number of internal roles comprising Office Managing Partner, Finance Partner and the Personnel Partner.

For the year ended 31 March 2015 these roles were held by Mr J R Bates, Mr R A Cocker and Mr S Atkins respectively.

Other partners, directors and managers have direct responsibility for technical standards, training and ethics, money laundering compliance and IT strategy.

Departmental meetings between staff and their related partners take place throughout the year.

Internal quality control system

Clement Keys LLP has established a quality control system that encompasses the six elements of quality control embedded within International Standard on Quality Control (UK and Ireland) 1 (ISQC1).

Leadership responsibilities for quality within the firm

The firm has established partners with responsibilities for the quality of work carried out.
The firm’s Technical Partner and Technical Director are responsible for ensuring the use of appropriate methodology and adherence to auditing standards. They are also responsible for the maintenance of the firm’s technical library and for the provision of technical advice and assistance.
The firm’s Audit Compliance Partner assumes overall responsibility for the audit work that is carried out and is responsible for completing an annual Practice Assurance review of the firm and for the completion of the firm’s annual return to the ICAEW.

Ethical requirements

The firm has a nominated Ethics Partner who is responsible for ensuring that ethical standards are maintained throughout the firm. The firm’s ethical standards are contained within the firm’s Audit Manual which is available in soft copy to all partners and staff. On an annual basis all partners and staff must complete a Fit and Proper Declaration confirming that they are aware of the ethical standards under which the firm must operate and giving details of potential conflicts of interest; these
are reviewed by the Ethics Partner.

Acceptance and continuance of client relationships and specific engagements

The firm has developed robust procedures which deal with all ethical, statutory and practical aspects relating to client acceptance and dis-engagement.

Before accepting an appointment, and at the commencement of each annual audit assignment, the Responsible Individual considers the above and assesses whether the appointment should be accepted or whether the appointment should continue – as appropriate. In addition, before accepting appointment, we enquire of the outgoing auditor as to whether there are any professional or ethical reasons why we should not accept the appointment.

The acceptance of any new client is subject to the approval of two partners and any perceived high risk clients must be approved by the firm’s Technical Partner.

Human resources

The firm has established recruitment policies and has set entry level criteria for graduates and school leavers to ensure that all new trainees have the ability to succeed in both their professional exams and the workplace.

The firm has a published equal opportunities policy and strives to ensure that its workforce is diverse.
All staff are reviewed on a six monthly basis and feedback is provided to audit personnel on the completion of each assignment.

Engagement performance of audits

The firm uses proprietary audit software to complete the statutory audit of limited companies, charities and pension schemes and this is fully compliant with International Standards on Auditing (UK and Ireland).

All public interest client audits require a second independent partner review prior to the audit report being signed. In addition, all qualified audit reports require a second independent partner review.

Monitoring of audit quality

Each year a programme of cold file reviews is undertaken under the supervision of a partner responsible for the quality control review process. On a quarterly basis, the firm engages external reviewers to carry out a sample review of the firm’s audit files ensuring that each Responsible Individual has at least one file per year reviewed. On completion of each review the findings are communicated to the relevant Responsible Individual and manager and any recommendations arising from the reviews, of general application, are communicated to the Technical Partner and to staff.

Statement on the effectiveness of the internal quality control system

The partners are confident that the procedures detailed above, including the monitoring of the control system, ensure that the firm produces audits that have been performed to a high standard and that appropriate audit reports have been issued.

External inspection

Clement Keys LLP is authorised by the Institute of Chartered Accountants in England and Wales (ICAEW) to carry out audit work and as such is subject to oversight by the Institute’s Quality Assurance Department (QAD). In addition, the firm is subject to review by the Audit Quality Review Team.

In 2012, Clement Keys received an audit monitoring visit by the QAD. The visit took place in March 2012 and the report, which was finalised in August 2012, confirmed the continuance of the firm’s audit registration.

In consequence of its membership of PrimeGlobal the firm is subject to review by that organisation and as a result of contracts held with the European Commission it is also subject to periodic review by those organisations.

Public interest clients

The firm has audited one public interest entity in the financial year ended 31 March 2015.

This was:

Athelney Trust plc (listed on the London Stock Exchange)

Independence procedures

The firm’s independence procedures are designed to ensure compliance with the Auditing Practices Board Ethical Standards and the ICAEW Code of Ethics. The procedures include:

• Completion on an annual basis of independence and confidentiality statements by all partners and staff;

• Assessment of independence and compliance with ethical requirements by Responsible Individuals when considering acceptance of new clients, signing audit reports and considering reappointment as auditors; and

• Procedures to identify potential conflicts and the resolution of the same including reference to the firm’s Ethics Partner.

An annual internal review of audit independence practices is carried out by the Audit Compliance Partner together with an assessment of independence matters for non-audit services. The Audit Compliance Partner completed a review of independence compliance during September 2014.

Continuing professional education of partners and staff

Clement Keys LLP has in place an ongoing training programme for all staff throughout their career and has a dedicated internal training manager.

All student trainees attend an in-house series of courses over the period of their training contract which is designed to supplement their professional qualification training. These courses cover areas such as ethical standards, our audit approach, use of audit, accounts and taxation software and soft skills such as letter and report writing.

All other professional staff attend regular technical update courses provided both in-house and by an external professional training provider. These courses are selected by the Technical Partner and Technical Director and are designed to ensure that all staff keep abreast of technical developments in audit, accounting and taxation. In addition the firm provides courses on personal development and staff are encouraged to identify and attend courses that are relevant to their specific area of work.
Formal training courses are complemented by on the job training, coaching and mentoring.

Staff are responsible for maintaining their own continuing professional development records and maintenance of the same is reviewed as part of the firm’s staff appraisal programme. As part of the appraisal process, individual professional development needs are reviewed and training opportunities are identified.

The firm is Investor in People accredited.

Financial information

Year ended 31 March 2015
Audit fees 2.4m
Non-audit fees 4.0m
Total turnover 6.4m

15 month period ended 31 March 2014
Audit fees 2.7m
Non-audit fees 4.8m
Total turnover 7.5m

Partner remuneration

Equity Partners are remunerated solely out of the profits of the firm. The profit sharing arrangements are set on an annual basis by the equity partners and comprise three elements - management responsibility, performance and return on capital.

The remuneration of Partners who are Responsible Individuals is not linked to the provision of non-audit services to their audit clients.


May 2015


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