Chartered Accountants

Transparency Report

About Us

TRANSPARENCY Report 2011

This report by Everett & Son has been prepared in June 2011 to meet the requirements of the Statutory Auditors (Transparency) Instrument 2008 and it relates to the year ended 31st March 2011.

Legal structure and ownership

Everett & Son (“the Firm”) is a partnership. It is wholly owned by its members, who are commonly referred to as partners. At 31st March 2011 there were 3 partners. All Audit work is carried on through Everett & Son.

In the UK the Firm operates within the Everett Group which provides a full range of compliance and regulated services and other business advisory, accounting, tax and consulting services. The Everett Group comprises Everett & Son, EBB Consultants Limited, Everett Horder Limited, Everett Macleod Limited, Everett International Limited, Everett Nominees Limited and Everett Consulting Limited. All Audit and compliance based services and regulated work is carried on through Everett & Son, except for Financial Services which is provided by Everett Macleod Limited, an independent financial advisor and an appointed representative of Chesterton House Financial Planning Limited which is authorised and regulated by the Financial Services Authority. All elements of the Everett Group are wholly owned by the partners and directors.

We have an affiliation with a professional accounting office in Switzerland and a link through that office to many other countries worldwide.

Governance

The Partners are collectively responsible for setting the firm's strategy and protecting the interests of its members. The partners meet regularly on an informal basis and formally at least every six months.
The Managing Partner is responsible for the day-to-day management of the firm to ensure that the agreed strategy is implemented.

Senior Partner : James Griffin F.C.A.
Managing Partner : Jonathan Cross F.C.A.

The Partnership continuously monitors developments in corporate governance and benchmarks the firm’s performance against them. In addition, Everett & Son embraces best practice in a way that is relevant to its activities, the risk environment it faces and the needs of its clients and people.

Risk management

The Partnership appoints the firm's Risk Partner, who is responsible for advising on the key risks the firm faces and the effectiveness of the systems to control those risks. The Partners meet regularly and have identified four principal areas of risk as: Financial, operational, strategic and professional.

Financial risks include working capital, liquidity and credit risk, which are managed by regular monitoring and review of exposure.

Operational risk is mitigated by a system of formal controls and processes and is backed up by the firm’s disaster recovery and business continuity plans.

Financial and operational risks are the responsibility of the Managing Partner, operating in conjunction with managers.

Strategic risk is monitored by the Partnership having collective responsibility for the direction of the business.

Professional risk is the responsibility of the Risk Partner who seeks to ensure the quality, objectivity and independence of client services, through the provision of guidance and oversight on client acceptance and the conduct of professional services.

Quality control system

In relation to audit and other assurance engagements, the firm’s system of quality control is designed to provide it with reasonable assurance that the firm, its partners and staff comply with relevant professional standards and regulatory and legal requirements, and that reports issued by the firm are appropriate in the circumstances.
The firm’s quality control system includes the following elements:

Leadership;
Ethics;
Client and engagement acceptance;
Human resources;
Engagement performance; and
Monitoring.

Leadership

Ultimate responsibility for the firm’s system of quality control lies with the Senior Partner.
The firm, and the individuals with responsibility for various aspects of quality control, ensure that the overriding requirement for quality in everything that the firm does is reinforced by clear, consistent and frequent messages and supported by the firm’s actions. The firm’s commitment to quality, and the quality control procedures needed to ensure that it is achieved, are embedded in its training and technical materials, and communicated through both formal newsletters and through informal and ad-hoc forms of communication.

Ethics

Professionalism, ethics and independence take precedence over all other aspects of the firm’s work. Responsibility for the firm’s policies and procedures lies with the Ethics Partner, who also provides confidential advice and guidance to other partners and members of staff on professional ethics. The firm’s policies and procedures meet or exceed the requirements set by the Institute of Chartered Accountants in England & Wales, the Auditing Practices Board and the International Federation of Accountants. Induction training for all new partners and staff includes an introduction to our ethical and independence polices. Further training on the firm’s policies and procedures in relation to Professional ethics is provided regularly, and always when rules or policies and procedures change. The firm, both internally and through working with other member firms of The Everett Group, ensures that it has appropriate mechanisms in place to ensure that it has a central and up to date record of the scope of work undertaken in respect of every client, and can evaluate the overall effect that this has on the firm’s independence. The firm obtains confirmation of compliance with independence requirements from all partners and staff both when they join the firm and at least annually thereafter. All personnel are required to consult our database of prohibited investments, which includes details of all publicly traded audit clients, before making personal investments. Compliance with the firm’s independence procedures is covered within the annual review of the firm’s compliance with applicable regulatory requirements.

Client and engagement acceptance

For new assignments, a thorough client engagement process is conducted that covers anti-money laundering, ethical issues and other professional risk assessment measures. Every potential audit client is considered in relation to:

the reasons for the proposed change in auditor, and through making enquiries of the predecessor auditor
potential independence risks and possible conflicts of interest
the firm’s resources and experience, to ensure that the firm will be able to complete the assignment to the highest professional standards
the management and ownership of the potential client, including confirming the identity of individuals; and
the potential client’s business and the risk associated with the industry or area within which it operates.

Similar safeguards apply to ongoing client relationships and the firm’s independence in relation to audit clients is reassessed at both the commencement and the conclusion of each audit.

Human resources

The firm’s systems, policies and procedures are designed to enable us to provide the highest quality of professional services. But a professional service firm is only ever as good as the people within it. To ensure that we have partners and staff with the capabilities, competence and ethical standards we need to provide the quality of audit work we require, we have clear policies and procedure covering:

recruitment
regular evaluation of performance
capabilities and competence
career development and promotion
compensation; and
estimation of staff needs.

We seek to recruit individuals with integrity, intelligence, motivation and the ability to progress. Our staff are evaluated regularly, taking into account their performance in the period under review, and aiming to identify any ways the firm can assist in ensuring that they continue to progress to be able to meet their full potential. The frequency of evaluations depends on the level of the individual, with some junior staff assessed at the end of larger individual assignments, and others evaluated on a six-monthly or annual basis.

Engagement performance

All audit engagements are undertake using the firm’s common audit methodology , which has been developed internally and in conjunction with the HAT Group of accountants. This methodology is applied, as well as using audit software, which has been obtained from leading commercial suppliers, where appropriate. The methodology covers all aspects of the audit process including:

risk assessment and audit planning
briefing of audit staff
performance of audit fieldwork
documentation of audit fieldwork
supervision of staff and review of work performed
consultation; and
reporting in accordance with applicable legal and regulatory requirements.

Audits of public interest entities and other high risk assignments are subject to an engagement quality control review by an experienced audit partner with no other involvement in the provision of services to the client. Clients with certain risk characteristics are also subject to review by a second audit partner, looking specifically at the relevant risk area and/or a full review of the audit file by members of the firm’s compliance department.

Monitoring

In addition to monitoring of active audit files by an engagement quality control reviewer, second partner or member of the compliance department, the firm also operates, in conjunction with the HAT group of accountants, a system of cold audit file reviews throughout the year. The programme of audit file reviews ensures that the quality of work of all audit partners and managers is reviewed on at least an annual basis. The selection of audit files for review is risk weighted. Such reviews are intended to ensure that the audit work has been undertaken in accordance with applicable standards and regulations, that the firm’ s policies and procedures have been followed, and that the audit reports provided are supported by sufficient appropriate audit evidence.

The regulatory environment

Everett & Son is registered to undertake audit work by the Institute of Chartered Accountants in England & Wales. Our audit work is examined either by:

the Audit Inspection Unit of the Professional Oversight Board, part of the Financial Reporting Council, for public interest audits; or
the ICAEW's Quality Assurance Directorate for other audits.

The Audit Registration Committee of the ICAEW considered the outcome of this work in 2009 and confirmed the continuance of the firm’s audit registration.
The firm is also subject to Practice Assurance Reviews by the ICAEW Quality Assurance Directorate, which cover client services not otherwise regulated.
The partners consider recommendations made by regulators and take action to implement appropriate changes.

Public interest audit clients

A list of the public interest entities for whom Everett & Son carried out a statutory audit during the year ended 31st March 2011 is provided in Appendix 1.

Continuing professional development

The Firm has access to up to date comprehensive online reference databases and materials including specialist industry materials. These cover all aspects of policy, procedure and methodology as well as containing a complete library of UK and international accounting, auditing and ethical requirements. To support and keep theoretical knowledge up to date, all partners and staff eligible for appointment as statutory auditors receive regular communications on technical and regulatory topics as they arise. The Technical Services Department of the HAT Group of accountants provides consultation support on all aspects of auditing, accounting and regulatory requirements including subject matter experts in specialist industries.

The firm’s internal training curriculum provides a broad range of technical solutions as well as business and personal skills programmes. Partners are required to participate in the internal objective setting and related performance appraisal processes. Through this they assess their on-going personal development needs and identify applicable development activities.

Financial information

An analysis of the total turnover of Everett & Son for the year ending 31st March 2010 is shown below:

	2011	2010
	£'000	£'000
Audit services	350	338
Non-audit services to audit clients	143	100
Services to non-audit client	510	585
Total turnover	1,003	1,023

Partner remuneration

Partners are remunerated solely out of the profits of the firm. The final allocation and distribution of profit to individual partners is made, once their performance has been assessed and the annual financial statements have been approved, by the Partnership. Each partner’s profit share comprises three interrelated profit-dependent components:

responsibility income – reflecting the partner’s sustained contribution and responsibilities
performance income – reflecting how a partner has performed; and
equity unit income – reflecting the overall profitability of the firm.

Appendix 1: Public interest entities

This includes audit clients who have issued transferable securities on a regulated market (as defined in the Statutory Auditors (Transparency) Instrument 2008 (POB 01/2008), for whom Everett & Son issued an audit opinion between 1st April 2010 and 31st March 2011. Where an audit client is a parent undertaking the list excludes any of its subsidiaries.

Ross Group Plc - London Stock Exchange

If the definition of a “regulated market” (as defined in the Statutory Auditors (Transparency) Instrument 2008 (POB 01/2008) were to be relaxed such that it included companies whose transferable securities were traded on either AIM or PLUS Markets, then, for the period between 1st April 2010 and 31st March 2011, the following audit clients would fall within the revised definition.

Pegasus Helicopter Group - PLUS Market

Everett & Son Chartered Accountants
35 Paul Street London EC2A 4UQ
Tel: +44 (0)20 7628 0857
Fax: +44 (0)20 7628 7253
www.everettgroup.co.uk
6 June 2011