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HLB MANN JUDDTransparency Report Part A: Australia and New Zealand Network
Year Ended 30 June 2017
Part A: Australia and New Zealand Network
1. Introduction
2. About HLB Mann Judd
3. Quality Control
4. Independence
5. Our People
6. Our Clients
7. Financial Information
Part B: HLB Mann Judd (NSW)
Part C: HLB Mann Judd (WA)
CONTENTS
3
Welcome to the HLB Mann Judd Australasian Association Transparency Report for the year ended 30 June 2017. This report details the audit operations of 9 of our member firms who provide audit services to organisations of all sizes across Australia.
Audit is an integral part of our business. We are proud of the reputation we have developed in the market place and are committed to being transparent about our assurance services.
We have allocated significant resources towards the development of audit best practice and good corporate governance. It is our goal to ensure stakeholders are confident that an HLB Mann Judd audit opinion can be relied upon.
As noted in our firm highlights, it has been a strong year for HLB Mann Judd as we strive to be ‘the most highly regarded’ accounting firm in Australia and New Zealand. We have recently received recognition for contribution and investment in our clients, people and community.
It is an exciting time to be part of the profession. Rapidly changing business conditions as well regulatory requirements present new and dynamic challenges. We are therefore ensuring our people are being trained not only in the
technical aspects of the business but also in how to have open and honest conversations with clients through active listening and structured questioning.
Our vision and values are at the core of everything that we do. We invite you to learn more about HLB Mann Judd’s values, people and winning culture at www.hlb.com.au.
While it is not a requirement of legislation, all member firms have contributed to the information disclosed in this report as we view it as an opportunity to share information about HLB Mann Judd.
Tony Fittler Chairman
Tony FittlerChairman
1. INTRODUCTION
Mark MullerChairman Audit and Accounting Standards Committee
Mark MullerChairman Audit and Accounting Standards Committee
2017 Highlights
zz Named ‘Best Accounting Firm’ ($50m-$500m) in the 2017 Financial Review Client Choice Awards.
zz Rolled out The HLB Way across all firms. The HLB Way is a standard of excellence which all of our clients deserve.
zz The introduction of the HLB Mann Judd Audit Accelerator Program which provides hands-on experience to intermediate level auditors to accelerate their learning and skill development.
zz Shortlisted for three 2017 Women in Finance Awards. The awards recognise diversity and contributions made by our leaders to the wider business community.
zz Hosted the 2017 HLB International Asia Pacific Conference in Melbourne. More than 19 countries were represented as we continue to foster and strengthen our relationships in the region.
zz Proudly welcomed the appointment of three partners and five directors to the leadership teams in Melbourne and Brisbane.
4
Australia & New Zealand NetworkHLB Mann Judd is a leading mid-sized chartered accounting network, which means we are big enough to have all the experience and knowledge and small enough to work with our clients on a personal basis. The HLB Mann Judd Australasian Association consists of 11 member and representative firms (hereto referred to as “HLB Mann Judd firms”) and has approximately 640 staff, including 80 partners. Our partners are hands on and develop a deep knowledge of our clients’ businesses.
HLB Mann Judd firms are typically ranked as one of the leading mid-sized firms in their market and have a reputation for excellent client service, as indicated by our rankings in external surveys.
HLB Mann Judd is proud to be a multi-award winning accounting firm. This year, we were named ‘Best Accounting Firm’ ($50m - $500m) in the Financial Review Client Choice Awards. This is the fifth consecutive year our clients have voted for and awarded us for our client service.
As a full service accounting and advisory firm we assist clients across all aspects of their business and personal finance needs including:
zz Audit & Assurance
zz Business Services
zz Corporate Advisory
zz Tax Consulting
zz Wealth Management
For more information about our services, please visit our website. www.hlb.com.au
HLB Mann Judd is a proud and active member of the HLB International ("HLBI") network. We have representation on the HLBI Executive Committee and Council as well as HLBI Audit Working Group.
International NetworkHLBI is a leading worldwide network of independent professional accounting firms and business advisers. Formed in 1969, HLBI services clients through its member firms in 140 countries in over 660 offices worldwide.
HLBI is a member of the Forum of Firms, part of the International Federation of Accountants (IFAC). It is committed to the highest quality standards in financial reporting and auditing practices with all members meeting specific quality criteria both nationally and internationally. The network carries out quality assurance review of all prospective members, and of all existing members on a regular basis.
HLBI has no liability for acts and omissions of any member of the network and vice versa.
For more information on HLBI, please visit the website. www.hlbi.com
2. ABOUT HLB MANN JUDD"More than 640 staff,
including 80 partners.
HLB International660 Offices
2,210 Partners20,110 Staff
5
Governance & Legal Structure Network – Australia & New Zealand
HLB Mann Judd Australasian Association (“the Association”) is an unincorporated association made up of member firms. Members of the Association are independently owned firms from Australia and New Zealand that each carry on their own separate and distinct businesses.
The Association is a not-for-profit entity that does not provide professional services but provides services to each of the member and representative firms. It charges member firms a fee calculated as a percentage of their gross fees in order to cover costs. The costs incurred by the Association are for services such as quality control, human resources, marketing, IT and publicity where the benefits of the service can be gained by all firms and are cost effective.
Membership is governed by Association Agreements. The key condition of membership is that member and representative firms are reputable and substantial accounting firms providing a range of quality accounting services including audit and satisfy all professional standards and quality assurance procedures required to practice as chartered accountants.
The Association’s governing body is the Executive Committee. The Executive Committee comprises managing partners from each of the full member firms. The Executive Committee is ultimately responsible for the strategic direction of the Association and the approval of policies for application to HLB Mann Judd firms.
Service Line Sub-Committees and Industry Specialisation Groups are formed to facilitate knowledge sharing and promote consistency in quality of services.
HLB Mann JuddFirms
IndustrySpecialisations
Service LineSub-Committees
AustralasianResources
Mining &Resources
Audit & Accounting Standards
ProfessionalStandards & Quality
Health &Aged Care
BusinessAdvisory
Marketing & BusinessDevelopment
Not-for-Profit TaxConsulting
HumanResources
FinancialServices
WealthManagement
Information Technology
Hospitality
BusinessRecovery/Restructuring
& Risk Advisory
Property &Construction
Family Business
ExecutiveCommittee
Corporate Advisory
6
Service Line Sub-Committees
Service Line Sub-Committees provide recommendations to the Executive Committee on areas of expertise. Sub-Committees are comprised of representatives from each of the HLB Mann Judd fi rms and promote best practice in service lines across the network.
HLB Industry Specialisation Groups
In order to provide high quality comprehensive advice, we need to understand the unique challenges of the industries our clients operate in. We have developed specialist industry knowledge by working with several clients within a number of key industries.
HLB Mann Judd partners and directors have experience across a wide range of industries.
Network Consistency
The Association employs national resources to support member fi rms in the delivery of their local services by supporting quality, consistency and effi ciency across member fi rms.
It is a condition of membership of the Association that HLB Mann Judd fi rms comply with the Association's policies.
The Director of Professional Standards reports directly to the Executive Committee and advises the Executive and its Sub-Committees on quality control, independence, audit quality, emerging professional and regulatory issues and risk management. The Director of Professional Standards also oversees the Association’s Audit Peer Review Program and network monitoring programs.
HLB Mann Judd Firms
Each HLB Mann Judd fi rm is independently owned and operated by the partners of each fi rm using a variety of private entities including unit and discretionary trusts, partnerships and proprietary companies. The partners of each fi rm are ultimately responsible for governance of their fi rm and meet regularly to discharge their responsibilities as business owners. Each fi rm has an elected managing partner and many of the larger HLB Mann Judd fi rms have an executive group of partners to assist the managing partner in the day to day running of the practice.
Accountability and reporting is by divisional service lines. Each fi rm has a Local Quality Leader. More details on fi rm structure and governance arrangements for HLB NSW and WA are included in Parts B and C of this report.
Industry Specialisation Groups
Not-for-profit
Mining & Resources
Health & Aged Care
Financial Services
Family Business
Hospitality
Property & Construction
Freight Forwarding
Legal
7
Elements of Audit Quality At HLB Mann Judd, we have strong policies supported by robust processes that ensure that the audit engagements delivered by HLB Mann Judd fi rms are of consistently high quality.
For us, quality is not just about ‘ticking a box’, it underpins everything we do.
The HLB Mann Judd approach to quality is to focus on the areas where we can have the greatest impact. While acknowledging the impact of the regulatory environment, client governance features and interaction between these elements, the table below highlights the features of a quality HLB Mann Judd audit.
3. QUALITY CONTROL
Tone at the top
Investment in quality tools
Importance of independence
Quality technical support
Accessible to clients
Audit professionals
Recruitment delivers the right
people
Focus on scepticism
Technical skills and personal
qualities
Timely appraisals and
training
Robust supervision and
review
Robust client acceptance
process
ASA compliant methodology
Appropriate allocation of
responsibilities
Partner involvement
Adequate time to undertake
role
Embedded independence
processes
Annual firm QC assessment
Peer review program
Responsive to external reviews
Focus on continual
improvement
Oversight and accountability
Cultivating Audit Quality
"Quality is not just about ticking a box, it underpins
everything we do."
8
Internal MonitoringInternational
The objective of the HLBI Audit Quality Review is to ensure that member firms maintain the quality of the audits they perform.
The review examines:
zz The firms’ compliance with the International Standard on Quality Control ISQC 1 Quality Control for Firms That Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Service Engagements; and
zz A sample of audit files using the HLBI Engagement Review Checklist (based on ISA requirements) to ensure that sufficient evidence exists to support the opinion given and that the opinion given was appropriate.
The last review of HLB Mann Judd by HLBI was in 2015. There were no adverse issues raised other than minor issues. A level 1 grading the highest that can be attained was achieved. No follow up action was considered necessary or required. HLB Mann Judd firms are reviewed at least every three years.
Australasia
The Australasian Audit Peer Review Program is governed by the Association’s Audit Peer Review Charter and administered by HLB Mann Judd’s Director of Professional Standards. HLB Mann Judd firms with significant audit practices are reviewed annually and cover the following:
zz Compliance with HLB Mann Judd’s Quality Control and Independence policies as set out in the Network Manuals.
zz One audit engagement file per office is
reviewed using the Association’s Engagement Review Checklist which examines compliance with Australian and International Auditing Standards.
zz Each audit partner has a minimum of one engagement file reviewed to establish whether there is sufficient appropriate audit evidence to support the opinion issued and that the audit opinion was appropriate.
Peer Review reports are issued annually to the managing partner of the respective HLB Mann Judd firm. Where necessary, HLB Mann Judd’s Director of Professional Standards assists the firms to undertake any remedial action.
Firm
In addition to the Audit Peer Review Program conducted by the Australasian Network, all of the HLB Mann Judd firms with substantial audit practices complete further cold reviews of audit engagement files to ensure that the key professional requirements and firm policies have been complied with. Details of firm specific monitoring for NSW and WA practices are set out in Parts B and C of this report.
Each firm reviews its compliance with the Quality Control and Independence Manuals on an annual basis and reports to the firm’s governing body. A copy of the firm’s Annual Report on Quality Control and Independence, along with a self-assessment checklist, is provided to the Director of Professional Standards.
Staff are given regular feedback on the quality of their work through the performance appraisal systems. Performance appraisals also provide important information for the continuing education program.
"Each firm reviews its compliance with the Quality Control and
Independence Manuals on an annual basis and
reports to the firm’s governing body."
9
Engagement
In addition to the periodic monitoring of fi rm quality controls, there are a number of important routine controls:
zz Engagement Acceptance & Continuance procedures – The fi rm will only undertake and continue client relationships and engagements where our QC procedures indicate that we:
zz Have the necessary capability (including time, skills and resources);
zz Have considered the client’s integrity; and
zz Can comply with our ethical principles, including independence.
zz Engagement QC checklists – Engagement checklists act as a reminder to engagement teams to ensure that all essential procedures have been undertaken.
zz Supervision & Review – Engagement partners are responsible for ensuring adequate supervision occurs on engagements and that all working papers are reviewed by a more senior engagement team member than the preparer. Engagement working papers must be reviewed prior to issuing an audit opinion.
zz Engagement Quality Control Review (“EQCR”) – An ECQR is required for all Public Interest Entity audits and such other engagements that are deemed ‘higher than normal risk’. The objective of the EQCR is to minimise the possibility that audit opinions are issued that are not in accordance with the fi rm’s quality control policies and/or are considered not appropriate in the circumstances. The reviewer examines planning, concluding and other documents that cover the signifi cant engagement issues.
The EQCR is completed prior to the audit opinion being issued.
zz Consultation – Engagement teams are required to seek assistance from others where diffi cult or contentious issues arise. The teams may consult suitably experienced individuals within the HLB network or externally if necessary.
zz Difference of Opinion – HLB Mann Judd has established processes to deal with differences of opinion on audit engagements should they arise.
Audit Engagement File
Engagement Acceptance & Continuance
Engagement QC Checklists
EQCR Sign Off (if applicable)
Consulation (if applicable)
Difference of Opinion (if applicable)
Supervision & Review
Essential Documentation on Audit Engagement Files
Critical Risks Addressed
Independence Assessment
10
Statement on Effectiveness of Internal Quality Control Systems The systems of quality control supporting our assurance practices are designed to provide reasonable assurance that:
zz Assurance engagements conducted by the firms comply with Australian Auditing and Assurance Standards, relevant ethical requirements and applicable legal and regulatory requirements; and
zz Reports and opinions issued by the firms are appropriate in the circumstances.
We are satisfied that the firms’ systems of internal quality controls are robust, operate effectively and allow us to identify areas where improvements are necessary. The firms’ management have considered the results of our internal monitoring programs and reports issued by regulators in reaching this opinion.
External Monitoring HLB Mann Judd is subject to a number of external reviews in Australia and New Zealand by regulators and professional bodies. The following timeline shows reviews that have been conducted in the past five years.
All findings from external bodies are evaluated to determine whether we can improve our processes. We also carefully consider issues raised in public reports.
We are not permitted to disclose detailed findings from external reviews and readers are advised that no assumptions regarding the scope of, or findings from, any of the above inspections should be made.
Financial Markets
Authority (NZ)Auckland
Queensland Audit Office
Brisbane
New Zealand
Institute of Chartered
AccountantsAuckland
Victorian Auditor-General’s
OfficeMelbourne
ASICBrisbane,
Melbourne, Perth, Sydney
2013 20162015 2017
NSW Audit Office
Lismore
QueenslandAudit Office
Lismore
Victorian Auditor-General’s
OfficeMelbourne
Victorian Auditor-General’s
OfficeMelbourne
ASICMelbourne,
Perth, Sydney
2014
CA ANZAustralian Firms
Financial MarketsAuthority (NZ)
Auckland
ASICMelbourne
Australian National
Audit OfficeBrisbane
11
Auditor independence is fundamental to audit quality. HLB Mann Judd has designed and implemented a number of important practices to underpin this vital principle. Our independence processes are monitored periodically to ensure that they are operating effectively and corrective action is taken where appropriate.
Our Independence Manual sets out our expectations of HLB Mann Judd personnel. The manual assists our people to identify relationships, circumstances and activities which may threaten independence. Our approach to independence is consistent with the requirements of Professional Standard APES 110: Code of Ethics for Professional Accountants and applicable legislation. The manual also specifies certain relationships or circumstances that are generally prohibited.
Failure to comply with HLB Mann Judd’s independence policies and procedures is a serious risk to our reputation and personnel who fail to comply are subject to disciplinary action. Some of our key independence practices are illustrated below.
Review of Independence Compliance Each year, HLB Mann Judd firms review their compliance with quality control and independence procedures. Firms complete the HLB Annual QC & IND Checklist and report matters including any breaches to the firm’s governing body and to the Association. HLB Mann Judd firms that participate in the Australasian Association Audit Peer Review
Program provide, for review, documentation to substantiate that key controls are operating.
The last report by full member firms was received in March 2017 for the year ended 31 December 2016. Firm level independence testing did not reveal any conflicts of interest nor did it identify any other matter that had not been adequately addressed.
International HLBI maintains a global independence register of audits conducted by network firms to assist in identifying potential conflicts at an international network level. The register is updated at least annually.
Independence Manual Policies and Procedures
Monitoring and Corrective Action
Consultationto Resolve
Identified Issues
Conflict CheckingProcess for New
Engagements
Non Audit ServicesConsultation
Process
Development and Maintenance
of Restricted Client List
Audit PartnerRotation Plan
for PIEs
EQCR SpecificallyEvaluates
Independence
EngagementAcceptance &ContinuanceProcedures
Audit EngagementTeam Certify
Independence
Annual Ethics &Independence
Declaration by allStaff
IndependenceTraining &
Acknowledgement
4. INDEPENDENCE
12
The skills, attitude and qualities of our people are one of the essential drivers of audit quality.
Our ability to continue to deliver quality services requires a strong emphasis on building and maintaining the capability of our people.
Building Capability Capability in our people is developed through a variety of methods, including the following:
Initial Professional Education
Professional staff ordinarily commence with an undergraduate or graduate degree and are expected to complete a professional program such as the CA program. HLB Mann Judd provides financial and other support where personnel are undertaking CA or an equivalent program.
Continuing Professional Development
The continuing competence of HLB Mann Judd’s personnel depends, to a significant extent, on an appropriate level of continuing professional development so that personnel maintain their knowledge and capabilities. We therefore emphasise the need for continuing training for all levels of firm personnel, and provide the necessary training resources and assistance to enable personnel to develop and maintain the required capabilities, competence and critical analytical skills.
Work Experience
On-the-job training is an essential component of professional development. This includes the assignment of personnel to appropriate engagement tasks combined with effective instruction and supervision. Staff appraisal processes provide accurate and timely feedback and help to identify future development opportunities.
Coaching and Mentoring
Professional scepticism and having an enquiring mind are fundamental elements of an independent audit and is learnt and reinforced by staff interactions with partners, directors, managers and mentors, as well as tailored training courses.
Competency Framework Development
Our competency framework clearly articulates the competencies expected in our people. The framework forms the basis for selection, appraisal and development of our people.
5. OUR PEOPLE
"The skills, attitude and qualities of our people are one of the essential drivers of audit quality."
13
Identifying Professional Development Needs HLB Mann Judd has established the following procedures for identifying training needs to ensure that staff performing specific jobs are appropriately educated, trained and experienced in order to be competent in their roles:
zz Outcome from performance appraisals.
zz Partner, director or manager identification of training needs.
zz Requests from staff.
zz Discussion at divisional team meetings.
zz New direction in client services requiring specialisation.
zz Assignment of staff to new positions.
zz Findings from inspection or quality control reviews.
zz New technical or professional developments.
zz Course attendance evaluations.
Continuing Professional Development HLB Mann Judd develops the capabilities and competence of its staff through a variety of methods. Formal training courses are developed internally or are sourced from reputable professional educators including but not limited to the Chartered Accountants Australia and New Zealand (CAANZ), the Australasian CA Training Group (ACATG), Taxation Institute of Australia and GAAP Consulting. Formal courses may take the form of group conferences, webinars, workshops or seminars.
We expect, as a minimum, that personnel meet the professional development requirements of the CAANZ. A summary of these requirements is as follows:
zz The undertaking of CPE to achieve a minimum of 120 CPE hours over a three year period.
zz At least 20 hours must be completed annually.
zz Over the three year period, a maximum of 30 hours technical reading may be claimed as CPE.
Professional staff are expected and encouraged to take personal responsibility for maintaining their skills and knowledge by monitoring relevant professional developments.
HLB Mann Judd produces Financial Reporting and Governance News bi-monthly which provides a round-up of financial reporting and assurance developments. Staff also receive the HLBI quarterly audit newsletter.
Audit partners are required to satisfy ASIC registration requirements.
Responsive to learning needsIn 2016, a new national training program, HLB Accelerator was launched responding to a need to accelerate learning and skill development for intermediate level auditors. HLB Accelerator simulates the role of an ‘in-charge’ auditor using real client data using HLB methodology and tools giving auditors a chance to extend their skills by completing more complex aspects of audits in safe environment. Participants are coached by experienced auditor partners over the three day residential program.
14
Leadership in the Community and the Profession Our work with not-for-profit ("NFP") organisations is our way of giving back to the community.
Our people are encouraged to participate in a wide range of community and professional activities to enhance their capacity to think about and provide leadership on many different and important issues.
The firms also undertake a number of different initiatives to support their local communities. These take the form of pro bono work or discounted fees, fundraising and providing boardroom facilities free of charge to local NFPs.
Three initiatives we would like to highlight in 2017 is our work with Pro Bono Australia, Good 360 and the Exclusive Not-For-Profit Group.
Pro Bono Australia 2017 Salary Survey
HLB Mann Judd was proud to again be a sponsoring partner of Pro Bono Australia’s Salary Survey.
The Salary Survey, in its fifth consecutive year, provides strong benchmarking standards for Australia’s expanding NFP sector. It contains comprehensive salary data analysis and identifies clear trends in the NFP sector.
The Survey is an invaluable tool which addresses:
1. Salary levels for CEOs, Executives and Managers
2. Remuneration comparison across location, number of employees and operating budget
3. Benchmarking data for key roles
4. Remuneration policies used by organisations across the sector.
The survey findings were shared to the NFP community through a roadshow of events hosted by HLB Mann Judd firms across the country.
Good360 – Goods for the Greater Good
Good360 is a way for businesses to donate brand new, unsold goods to charities and NFPs to help Australians in need.
Through the support of HLB Mann Judd, Good 360 was able to implement a national survey to gain a clear understanding of what goods charities need, but cannot afford to purchase. HLB Mann Judd provided Good 360 with access to resources and expertise needed to complete survey.
The 2017 survey findings uncovered many NFPs require donations of office supplies to run their organisations and reduce the impact on overstretched budgets.
The Exclusive Not-For-Profit Group (“ENFP”)
The ENFP is an exclusive members only community for those working in the NFP sector. The group was established by HLB Mann Judd in Sydney. As a participant in the group, a NFP will have the opportunity to attend exclusive boardroom briefings, receive relevant news updates and network with like-minded individuals.
Over the course of the year, the group has grown to 800 members representing more than 300 charities and NFPs.
For more information about ENFP, please visit our website. www.hlb.com.au
15
HLB Mann Judd network firms conducted audits for the following listed entities during the year ended 30 June 2017:
A1 Consolidated Gold Limited¹
Activistic Limited¹
Admedus Limited¹
Alterra Limited¹
Anova Metals Limited¹
Arrowhead Resources Limited¹
Aspire Mining Limited¹
Athena Resources Limited¹
Aurora Labs Limited¹
AusQuest Limited¹
Barra Resources Limited¹
Black Star Petroleum Limited¹
Blaze International Limited¹
Bligh Resources Limited²
BOD Australia Limited
BPH Energy Limited¹
Brookside Energy Limited¹
Canyon Resources Limited¹
Carnavale Resources Limited¹
Castillo Copper Limited¹
Cellnet Group Limited²
Chalice Gold Mines Limited¹
Challenger Energy Limited¹
Collaborate Corporation Limited¹
Connected IO Limited¹ (formerly G8 Communications Limited)
Contango Asset Management Limited²
Corizon Limted¹ (formerly West Peak Iron Limited)
CVC Limited²
CWH Resources Limited²
Dateline Resources Limited²
Dreamscape Network Limited¹
Droneshield Limited²
Eildon Capital Limited²
Emerald Resources NL¹
Empire Resources Limited¹
Eneabba Gas Limited¹
Eumeralla Resources Limited¹
European Lithium Limited¹
EZA Corporation Limited¹
Flexiroam Limited¹
Forte Consolidated Limited¹
FYI Resources Limited ¹
GB Energy Limited¹
GBM Resources Limited¹
GME Resources Limited¹
Gowing Bros Limited²
Grandbridge Limited¹
Hampton Hill Mining NL¹
Harvest Minerals Limited¹
Hastings Technology Metals Limited¹
Highfield Resources Limited¹
Impression Healthcare Limited¹ (Mount Magnet South NL)
Intiger Group Limited
Jameson Resources Limited¹
JCurve Solutions Limited¹
Kalina Power Limited
Kin Mining NL¹
Korab Resources Limited¹
Lantern Hotel Group Stapled Entity²
LBT Innovations Limited
Lifespot Health Limited
Lindian Resources Limited¹
Linius Technologies Limited¹ (Firestrike Resources Limited)
Lionhub Group Limited²
Liontown Resources Limited¹
Longreach Oil Limited²
Luiri Gold Limited¹
MacPhersons Resources Limited¹
Magnum Gas and Power Limited¹
Magnum Mining and Exploration Limited¹
Manas Resources Limited¹
MEC Resources Limited¹
Merchant Opportunities Fund¹
Mobecom Limited²
Mount Ridley Mines Limited¹
MyFiziq Limited¹
National Veterinary Care Limited
Nemex Resources Limited¹
Neon Capital Limited¹
Nyota Minerals Limited¹
Oakajee Corporation Limited¹
OpenDNA Limited¹
Orinoco Gold Limited¹
Pan Asia Corporation Limited¹
Pelican Resources Limited¹
Phylogica Limited¹
PM Capital Asian Opportunities Fund²
PM Capital Global Opportunities Fund²
Power Resources Limited¹
Quantum Energy Limited²
Ram Resources Limited¹
Red Hill Iron Limited¹
Red Metal Limited²
Resonance Health Limited¹
Resource Development Group Limited¹
Rhinomed Limited
Sacgasco Limited¹
Sarama Resources Limited¹
Scotgold Resources Limited¹
Shark Mitigation Systems Limited¹
Sheffield Resources Limited¹
Southern Cross Credit Union
Southern Cross Exploration NL²
Stemcell United Limited²
Suda Limited¹
Summerland Credit Union
Supply Network Limited²
Syntonic Limited¹
Talisman Mining Limited¹
Target Energy Limited¹
Taruga Gold Limited¹
Technology Metals Australia Limited¹
Traka Resources Limited¹
Triangle Energy (Global) Limited¹
Triple Energy Limited¹
Uranium Equities Limited¹
Variscan Mines Limited²
Volt Resources Limited¹
Walkabout Resources Limited¹
Wellcom Group Limited
West African Resources Limited¹
WestStar Industrial Limited¹
White Cliff Minerals Limited¹
WHL Energy Limited¹
WINHA Commerce and Trade International Limited
Wonhe Multimedia Commerce Limited
World Titanium Resources Limited¹
Zelda Therapeutics Limited¹ (Gleneagle Gold Ltd)
¹ Audited by HLB Mann Judd (WA)
² Audited by HLB Mann Judd (NSW)
6. OUR CLIENTS
16
Consolidated revenue for HLB Mann Judd firms in Australia and New Zealand is set out below. Revenue for HLB Mann Judd (NSW) and HLB Mann Judd (WA) are disclosed in Parts B and C of this report.
7. FINANCIAL INFORMATION
$26mRevenue from Audits & Reviews
25%
$7mRevenue from Other Services provided to audit clients
7%
$69mRevenue from Non-Audit clients
68%
$102m Total Revenue
HLB MANN JUDDTransparency Report Part B: HLB Mann Judd (NSW)
Year Ended 30 June 2017
18
Legal Structure and OwnershipHLB Mann Judd conducts business through the following entities:
zz HLB Mann Judd (NSW Partnership) conducts statutory and other audits.
zz HLB Mann Judd Assurance (NSW) Pty Ltd, a registered audit company, also conducts statutory and other audits.
zz HLB Mann Judd (NSW) Pty Ltd.
zz HLB Mann Judd Corporate (NSW) Pty Ltd carries out work where certain licenses are required.
zz HLB Mann Judd Corporate Advisory (NSW) Pty Ltd.
zz HLB Mann Judd Wealth Management (NSW) Pty Ltd.
All of the entities mentioned above are owned and controlled by partners of HLB Mann Judd (a NSW Partnership) or by their associated investment entities. There are no outside shareholders.
Governance Structure
Partners includingEquity Partners
Quality Control& Independence
CommitteeRisk Management
Committee
Audit & Corporate Advisory
Business AdvisoryDivision
TaxDivision
Restructuring & Risk Advisory
Wealth Management
Division
Shared ServicesDivision
StaffCommittee IT Committee
ManagementCommittee
8. HLB MANN JUDD (NSW)
19
Executive Chairman
An Executive Chairman of Partners, who must be an equity partner, is elected by the Equity partners. The Executive Chairman is responsible for the leadership of the Management Committee and through it to provide:
zz leadership to the partners,
zz manage the business,
zz identify client opportunities, and
zz represent and maintain the public profile of the partnership.
Management Committee
The Management Committee includes the Executive Chairman and up to four equity partners elected by the equity partners.
The Executive Chairman normally serves a term of three years and the other members of the Management Committee serve a term of one year.
The Management Committee governs the conduct of the partnership and manages the business in accordance with the wishes of the partners.
The Management Committee has responsibility to:
(i) Prepare policies, strategic plans, business plans, projects and budgets for presentation to the partnership;
(ii) Prepare and present the annual partnership accounts;
(iii) Recommend, implement, monitor and review activities to maximise the overall profitability, operational efficiency and development of the
partnership;
(iv) Develop and acquire new products and services in accordance with strategic plans and budgets;
(v) Coordinate the activities of the different aspects of the business and the partnership to ensure the efficient, effective use of resources and the provision of quality service.
Quality Control & Independence Committee
The Quality Control and Independence Committee assists the firm in its compliance with the HLB Mann Judd Australasian Association Quality Control Manual and Independence Manual, which sets out the policies and procedures the firm follows as part of its commitment to a quality practice.
Members of the Quality Control and Independence Committee are:
zz Tony Fittler
zz Darryl Swindells
zz John Raffaele
zz Michael Thurgood
zz Keith Robinson
zz Steve Grivas
Risk Management Committee
The Risk Management Committee is responsible for assisting the firm to manage the risks of its various businesses. The firm’s Risk Register is monitored, and the actions taken to comply with the Risk Management Procedures agreed upon. The Risk Management Committee is also responsible for implementing risk and compliance initiatives, and ensuring that the business complies with the firm’s Risk Management
Framework.
Members of the Risk Management Committee are:
zz Tony Fittler
zz Darryl Swindells
zz John Raffaele
zz Michael Thurgood
zz Keith Robinson
zz Steve Grivas
20
Partner Remuneration
The profits of the business are shared among the partners in accordance with their ownership interests in the firm. These partnership profits are distributed as determined by the Partnership Agreement. All profit distributions are based on the profitability and cash flow of the firm.
A modest amount of profit is distributed from a bonus pool, in accordance with a vote of equity partners.
Audit partners and staff are not remunerated by reference to revenue from non-audit services provided to clients.
Audit Quality Monitoring by the Firm
For the year ended 31 December 2016, a number of engagements were inspected and checked for compliance with Australian Auditing Standards using the Engagement Review Checklist as well as examining progress on issues identified in previous inspections. The results of the file inspections, which included recommendations for improvements to be made to engagement documentation, were discussed with the engagement team.
Australasian Peer Review Results
The last peer review report was dated 26 May 2017. The results of the review were considered by the firm’s Quality Control Committee and audit partners to identify appropriate follow up actions. Action plans are being developed.
$8.3mRevenue from Audits & Reviews
26%
$2.8mRevenue from Other Services provided to audit clients
9%
$20.9mRevenue from Non-Audit Clients
65%
$32.0m Total Revenue
HLB MANN JUDDTransparency Report Part C: HLB Mann Judd (WA)
Year Ended 30 June 2017
22
Partners
Quality Control &Risk Management
Committee
Corporate & AuditServices Division
Business AdvisoryServices Division
Tax ConsultingDivision
Wealth Management
Division
AdministrationDivision
IT Division HR Division
Legal Structure and OwnershipHLB Mann Judd conducts business through the following entities:
zz HLB Mann Judd (WA Partnership) conducts statutory and other audits.
zz The Merger Unit Trust – the firm’s service trust, units in which are owned by partners’ entities.
zz HLB Mann Judd Corporate (WA) Pty Ltd – AFS licensee owned by the firm’s partners.
zz HLB Mann Judd Wealth Management Services Pty Ltd
zz HLB Mann Judd Services (WA) Pty Ltd and
zz HLB Mann Judd (WA) Pty Ltd.
All of the entities mentioned above are owned and controlled by partners of HLB Mann Judd (WA Partnership) or by their associated investment entities. There are no outside shareholders.
Governance Structure
9. HLB MANN JUDD (WA)
23
Partners
The partners meet informally once a week and formally as required.
Managing Partner
The Managing Partner is appointed for a two year term from by equity partners. The Managing Partner performs the role of Chief Executive and operates the firm on behalf of the partners.
Quality Control & Risk Management Committee.
The partners are ultimately responsible for quality control in the firm, but have assigned operational responsibility for quality control, independence and risk to the Quality Control & Risk Management Committee.
The Quality Control & Risk Management Committee meets at appropriate times in accordance with an Annual Work Programme. The committee disseminates information relating to quality control, independence and risk management to staff as required.
Members of the Quality Control Committee are:
zz Norman Neill (Managing Partner)
zz Marcus Ohm (Head of Corporate and Audit Services Division)
zz Litsa Christodulou (Head of Business Advisory Services Division)
zz Peter Speechley (Head of Wealth Management Division)
Service Line Directors
Service Line Directors are responsible for leading the firm’s service lines and establishing quality control procedures that are consistent with the firm and the Association’s policies.
Partner Remuneration
The firm comprises equity partners and fixed profit share partners. Fixed profit share partners are those who have not yet been offered the opportunity to buy equity in the firm. Their remuneration is set based on available market rates.
Equity partners share profits of the firm equally. No audit partners receive any remuneration based on the selling of non audit services to audit clients.
Audit Quality Monitoring by the Firm
In addition to the Australasian Audit Peer Review Program and routine engagement controls, HLB Mann Judd (WA) carried out cold reviews of audit engagement files most recently during the year ended 31 December 2016. A sample of audit engagements were tested for compliance with a number of mandatory professional requirements and the appropriate completion of key engagement documentation. The results of the file inspections were discussed with the relevant audit team.
Australasian Peer Review Results
The last peer review report was dated 9 May 2017. The results of the review are being evaluated by the Quality Control & Risk Committee to ensure that appropriate follow up actions will be taken. The results are shared with the audit team.
$5.6mRevenue from Audits & Reviews
43%
$1.9mRevenue from Other Services provided to audit clients
15%
$5.5mRevenue from Non-Audit Clients
42%
$13m Total Revenue
hlb.com.au
Member Firms
Representative Firms
The HLB Mann Judd Australasian Association is an independent network of accounting firms, business and financial advisers with offices throughout Australia and New Zealand. Each member firm is separately owned and managed and has no liability for the acts and omissions of any other member firm. Not all services listed in this publication are provided by all member firms.
HLB Mann Judd firms are part of HLB International, world-wide network of independent accounting firms and business advisers.
© 2017 HLB Mann Judd Australasian Association
Hobart Lorkin Delpero Harris
31 Davey Street Hobart TAS 7000 Tel 03 6224 4844 | Fax 03 6223 7212 Email [email protected]
Lismore Thomas Noble and Russell
31 Keen Street Lismore NSW 2480 Tel 02 6621 8544 | Fax 02 6621 9035 Email [email protected]
Adelaide HLB Mann Judd
169 Fullarton Road Dulwich SA 5065 Tel +61 8 8133 5000 | Fax +61 8 8431 3502 Email [email protected]
Auckland HLB Mann Judd
Level 6, 57 Symonds Street Auckland NZ 1010 Tel +64 9 303 2243 | Fax +64 9 377 3053 Email [email protected]
Brisbane HLB Mann Judd
Level 15, 66 Eagle Street Brisbane QLD 4000 Tel +61 7 3001 8800 | Fax +61 7 3221 0812 Email [email protected]
Gold Coast HLB Mann Judd
Level 3, 2 Corporate Court Bundall QLD 4217 Tel +61 7 5574 0922 | Fax +61 7 5574 0632 Email [email protected]
Melbourne HLB Mann Judd
Level 9, 575 Bourke Street Melbourne VIC 3000 Tel +61 3 9606 3888 | Fax +61 3 9606 3800 Email [email protected]
Perth HLB Mann Judd
Level 4, 130 Stirling Street Perth WA 6000 Tel +61 8 9227 7500 | Fax +61 8 9227 7533 Email [email protected]
Perth (Insolvency WA) HLB Mann Judd (Insolvency WA)
Ground Floor, 15 Rheola Street Perth WA 6000 Tel +61 8 9215 7900 | Fax +61 8 9321 0429 Email [email protected]
Sydney HLB Mann Judd
Level 19, 207 Kent Street Sydney NSW 2000 Tel 02 9020 4000 | Fax 02 9020 4190 Email [email protected]
Wollongong HLB Mann Judd
Level 1, 65 Kembla Street Wollongong NSW 2500 Tel 02 4254 6500 | Fax 02 4226 2371 Email [email protected]
