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Audit and assurance
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Consulting
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Cyber
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Deals
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Environmental, social and governance (ESG)
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Financial services advisory
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Forensics and investigations
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Government and public sector
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Insolvency and global asset recovery
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International
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Restructuring
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Risk
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Tax
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Outsourced accounting services
Every business is different, the challenges they face vary but all need bespoke solutions. Businesses also share common ground when it comes to striving for reducing costs and improving efficiencies.
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Royalty and intellectual property audit
Intellectual property (IP) is valuable and one of the challenges for you as an IP owner, whether in film, TV, book publishing or consumer products, is ensuring that you are receiving all royalties due to you.
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Pensions
Assurance and financial reporting is key, and reporting with independent opinion gives confidence to trustees to support their governance processes.
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Healthcare assurance
Our healthcare assurance team supports local and national NHS bodies improve the quality of their clinical data and cost information to accurately reflect the care delivered
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Contract assurance
We know how complex accounting for large contracts can be. The services sector relies on successful deals and risks being isolated and understood.
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Brexit and political risk advisory
We can help you navigate political volatility.
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Business consulting
Challenges are specific and solutions do not translate perfectly from one business to another, which is why you told us you want a fully customised approach to professional services.
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Corporate simplification
Having too many companies in your group structure can be expensive, and the changing financial reporting and regulatory landscape can lead to additional compliance work.
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Economic consulting
Bespoke guidance grounded in complex economic theory and practical sector insight to help you make the right decisions.
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Financial accounting advisory services (FAAS)
Our FAAS team can support your finance function with the flexible resource they need to get results.
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Governance advisory
Helping you future proof your governance and decision-making structures
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International services
To ensure the continuity of service you expect, our International Business Centres (IBC), led by our experts from around the world, work together to coordinate and provide global delivery.
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People advisory
Create value by attracting, retaining and developing an agile and resilient workforce for continued business success.
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Strategy
Our Strategy and Modelling capabilities are focused on helping management teams make better, more rigorous and quantified business decisions
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Respond: Data breach, incident response and computer forensics
Are you prepared for a cyber failure? We can help you avoid data breaches and offer support if the worst happens.
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Comply: Cyber security regulation and compliance
Cyber security regulation and compliance is constantly evolving. Our team can support you through the digital landscape.
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Protect: Cyber security strategy, testing and risk assessment
Cyber security threats are constantly evolving. We’ll work with you to develop and test robust people, process and technology defences to protect your data and information assets.
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Our credentials
Search our transactions to see our experience in your sector and explore the deals advisory services we've delivered.
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Corporate finance
We combine award-winning technical expertise with the intuition, insight and confidence gained from our extensive sector experience and a deeper understanding of our clients.
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Debt advisory
Our debt advisory team can find the right lender to help you in restructuring. Find out how our experts can support you.
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Financial modelling
Models are at the heart of all business decisions. Whether you're looking to raise finance, buy or sell a business, assess strategic options, or just plan for the future, you're going to need a forecast. This is likely to come from a financial model.
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Operational deal services
Most transactions fail to achieve their goals. There are many reasons for failure.
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Restructuring
Protect and realise value throughout times of uncertainty, stress and distress
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Transaction services
We will identify key business issues through our rigorous and tailored risk and business analysis process. Our Transaction Services team will then work with you to resolve these issues with a reporting method designed to suit each client and their preferred medium.
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Valuations
The Valuations team has wide experience in valuations of private companies. We serve enterprises of all types and sizes, covering a wide range of industries
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The ESG agenda
Shape your ESG agenda by identifying the right metrics, sustainable development and potential business value impact.
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ESG driven business transition
Whatever your ESG strategy, we can support your organisation as it evolves while maximising efficiency and profitability.
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ESG programme and change management
Do you have the right capabilities to drive the delivery of your ESG strategy to realise your targets?
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ESG risk management
You must protect, comply, understand and influence to successfully manage the risk involved with ESG issues. We can help.
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ESG strategy, risk and opportunity identification
We can help you clearly define your ESG Strategy, with the risks and opportunities identified and managed.
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Create value through effective ESG communication
Building trust and engagement with your stakeholders on your ESG strategy.
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ESG metrics, targets and disclosures
The pressure to report your ESG progress is growing. Do your targets measure up?
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ESG governance, leadership and culture framework
Make the most of ESG opportunities by effectively embedding your strategy across your organisation.
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ESG and non-financial assurance
Support your board to be confident in supplying robust information that withstands scrutiny.
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Actuarial and risk
Grant Thornton's Actuarial and Risk team provides market leading actuarial and risk management advice to clients in the financial services sector and further afield. We consult extensively to the life insurance, general insurance, health insurance and pensions sectors as well as providing financial modelling and financial instrument valuation services more widely.
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Business consulting
The Financial Services Business Consulting (FSBC) practice is able to harness the skills, knowledge and experience within the Financial Services Group, to provide a full suite of services across the delivery lifecycle, from strategic advisory to assurance. FSBC provides market-leading consulting and advisory services to the banking sector.
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Business risk services
Our market-driven expertise helps firms keep growing and manage risk in an evolving regulatory landscape.
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Financial crime
Helping you fight financial crime in a constantly changing environment
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Financial services tax
In the Financial Services tax team, we provide tax advice to businesses from all over the world. We combine technical expertise with a commercial approach based on experience and deep industry understanding.
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Insurance audit, assurance and advisory
Today’s financial services environment is the subject of increasingly rigorous governance, accounting and regulatory requirements. In the light of this, we provide a truly robust and independent service to undertake external audits with a defined, industry-specific audit approach that is specifically tailored to the relevant sector.
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Leasing and consumer finance
We are a unique team in the accountancy profession and combine vast industry, product, and asset knowledge with a core service offering which adds real value to our clients.
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Litigation support
Our in-depth understanding of the industry, and our sensitivity to conflicts make us the ideal choice for law firms and lawyers looking for unrivalled levels of service. We provide a wide range of litigation support and investigation services to the financial services industry.
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Regulatory and compliance
Regulatory and compliance - We provide an exceptional level of regulatory and compliance support to both retail and wholesale organisations across the financial services industry.
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Risk and capital management
We help businesses determine which capital risk management approach fits them best, ensuring that compliance is a natural by-product and not the primary driver. While the regulatory dimensions of capital risk management are growing at an unprecedented pace, it is our understanding of the links between risk, capital and performance that benefits our clients.
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Transactions and restructuring
We carry out a wide range of transaction support services, including due diligence and business reviews to support acquisitions, lending transactions, acting as reporting accountants for financial businesses seeking a listing or trading on the capital markets.
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Computer forensics
Computer forensics - We can report on metadata and provenance, internet activity, external connections and copying, destruction of evidence, smart devices, and we can conduct detailed forensic searches.
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Corporate intelligence
Corporate intelligence often involves cross-border complexities. Our experienced team can offer support.
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Cyber advisory
Our cyber team helps you to identify and guard against potential cyber risks to your organisation and mitigate against data leaks and hacks
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Disputes advisory
Our team advises on quantum and other accounting or financial issues in commercial disputes, including acting as expert witness in litigation and arbitration.
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Financial crime
Helping you fight financial crime in a constantly changing environment
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Financial services investigations
We are market leaders in conducting and supporting investigations within the financial services industry
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Forensic data analytics
Our forensic data analytics team are helping businesses sift the truth from their data. See how we can help your firm.
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International arbitration
International arbitration has become the principal dispute resolution method for the determination of complex international commercial disputes.
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Matrimonial services
We provide a distinctive, high-quality and personalised service to family lawyers and individuals across the UK both pre and post-marriage.
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Monitoring trustee and competition services
Monitoring trustee and competition services - We provide independent Monitoring Trustee services to competition, financial, security and other regulatory bodies.
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Forensic investigations and special situations
Do you need clarity in an uncertain situation? If you're accused of wrongdoing we can help you get the facts right.
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Public sector advisory
To deliver excellent public services, local and central government need specialist support.
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Public sector audit and assurance
As a leading UK auditor, we have unparalleled insights into the risks, challenges and opportunities that you face.
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Public sector consulting
Helping public sector organisations maintain oversight of services and understand what's happening on the ground.
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Public sector governance and risk
Although arguably necessary to bring order to public financing, the impact of the accelerated public sector funding cuts represents an unprecedented scale of funding reduction. While the sector has so far risen to the challenge, enduring service and financial pressures create risks and opportunities and have particular implications for governance, risk management and internal control.
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Cryptoasset recovery
Get guidance and technical expertise on digital finance and cryptoasset recovery from our dedicated crypto hub.
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Grant Thornton Offshore
Grant Thornton Offshore is our one-stop global solution for insolvency, asset recovery, restructuring and forensics services.
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Contentious estates and family disputes
Managing complex, high net worth and sensitive issues such as divorce to resolution
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Corporate intelligence
When you're embarking on recovery proceedings, you have just a small window of opportunity to take meaningful action.
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Litigation support
Our in-depth understanding of the industry, and our sensitivity to conflicts make us the ideal choice for law firms and lawyers looking for unrivalled levels of service. We provide a wide range of litigation support and investigation services to the financial services industry.
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Personal insolvency
We are a leading provider of personal insolvency services, delivering practical solutions in a sensitive manner, maximising recoveries for creditors or by helping individuals seeking for appropriate debt relief solutions.
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Expand into new markets
Broadening your business horizons.
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Finding the right international contacts
Introducing you to the people with the experience you need to succeed.
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Getting more out of your existing international operations
How to stay in touch with, and make the most of changing markets.
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Setting up in the UK
Practical advice and expert input for anyone moving into UK markets.
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Contingency planning and administrations
In times of financial difficulty, it is vital that directors explore all the options that are available to them, including having a robust ‘Plan B’.
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Corporate restructuring
Corporate restructuring can be a difficult time. Let our team make the process simple and as stress-free as possible.
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Creditor advisory
We act as financial adviser to mainstream lenders, credit funds, special situation funds, security trustees and surety providers.
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Debt advisory
Our debt advisory team can find the right lender to help you in restructuring. Find out how our experts can support you.
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Financial services restructuring and insolvency
Financial services restructuring and insolvency is a competitive marketplace. Our team can help you navigate this space.
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Pensions advisory services
Our pensions advisory service helps manage risk and agree funding strategies. Find out how we can help you.
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Restructuring and insolvency tax
Tax will often be crucial in a plan to restructure a distressed business. Our team can guide you through the process.
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Compliance assurance
Since the financial crisis of 2008 the governance and conduct of financial services firms has been under increasing scrutiny.
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Data analytics
Deeper insight through data analysis is becoming commonplace, increasing the value, commercial challenge and calibre of insight delivered to the business.
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Enterprise risk management
Enterprise Risk Management (ERM) has been around for a long time, but many organisations have struggled to understand it or genuinely embrace it.
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Finance and risk management services
Our clients continue to prepare for and implement a range of new regulatory requirements, whilst having to navigate the uncertain macro-economic environment and structural change affecting the industry.
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Internal audit services
Recent high profile control failures and increased regulatory demands require organisations to gain independent and objective assurance over the effectiveness of internal controls and risk mitigation.
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People, culture and organisation
Whilst it is recognised that culture is a key enabler of strategy, the Chartered Institute of Internal Auditors has placed greater focus on the importance of organisations’ culture.
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Projects, capital programmes and transformation
Delivering significant medium and long term shifts in strategic direction, competiveness or performance often requires effective delivery of significant and complex projects and transformation programmes.
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Technology risk services
Technology has been a key driver for success and operational efficiency in all industries.
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Third party and contract assurance
Delivery of critical business activities, both business as usual and projects, increasingly means working with external partners for goods and services.
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Capital allowances (tax depreciation)
Advisory and tools to help you realise opportunities in capital allowances.
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Corporate and international tax
Accurate returns, managing risk & maximising opportunity.
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Employer solutions
It's a well-known fact that, in business, people are your greatest asset.
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Indirect tax
In recent years, there has been a domestic and global trend of Governments shifting emphasis from direct to indirect taxation. Globally, while corporation tax rates have generally decreased, VAT rates have risen.
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Our approach to tax
The Finance Act 2016 introduced the requirement for businesses like ours to publicise their tax strategies by the end of the 2018 financial year. We fully support such initiatives and believe that firms sharing their approach to tax can promote widespread transparency, build trust and benefit society as a whole.
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Private
You'll know just how important it is to maximise and protect your personal wealth.
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Real estate tax
The impact of the prolonged downturn continues to be felt in certain parts of the world but pockets of opportunity and optimism have emerged within the real estate. The UK real estate investment market has enjoyed high levels of capital inflow from a wide range of different investors groups and continues to be attractive.
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Research and development tax incentives
We can help you prepare optimised and robust research and development tax claims.
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Tax investigations and disputes
We make it simple to stay compliant and avoid HMRC tax disputes
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Tax risk management
We can help you manage your tax risk.
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Transaction and restructuring tax
Undertaking a transaction, such as fundraising, refinancing, acquiring or disposing of a business or assets, or a more fundamental restructuring is an important step. Businesses, lenders and stakeholders need to understand the impact of that transaction.
- Automotive
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Business services
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Consumer markets
- Energy, energy transition, and environment
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Financial services
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Government and public sector
- Industrials and manufacturing
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Not for profit
- Private sector healthcare
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Real estate and construction
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Technology, media and telecommunications (TMT)
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Skills and training
Get the right support to deliver corporate and vocational training that leads the way in an expanding market.
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Private education
Insight and guidance for all businesses in the private education sector: from early years to higher education and edtech.
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Facilities management and property services
Get insight and strategic support to take opportunities that protect resilience and drive UK and international growth.
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Recruitment
Helping recruitment companies take opportunities to achieve their goals in a market where talent and skills are key.
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Food and beverage (F&B)
We can help you find the right ingredients for growth in your food and beverage business.
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Travel, tourism and leisure
Tap into our range of support for travel, tourism and leisure businesses in this period of challenge and change.
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Retail, e-commerce and consumer products
With multiple challenges and opportunities in the fast-evolving retail sector, make sure you are ready for them.
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Banking
Our expertise and insight can help you respond positively to long term and emerging issues in the banking sector.
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Capital markets
2020 is a demanding year for capital markets. Working with you, we're architecting the future of the sector.
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Insurance
Our experienced expert team brings you technical expertise and insight to guide you through insurance sector challenges.
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Investment management
Embracing innovation and shaping business models for long-term success.
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Pensions
Pension provision is an essential issue for employers, and the role of the trustee is becoming increasingly challenging.
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Central and devolved government
Helping central and devolved governments deliver change to improve our communities and grow our economies.
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Infrastructure and transport
Delivering a successful transport or infrastructure project will require you to balance an often complex set of strategic issues.
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Local government
Helping local government leverage technical and strategic expertise deliver their agendas and improve public services.
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Regeneration development and housing
We provide commercial and strategic advice to assist your decision making in pursuing your objectives.
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Charities
Supporting you to achieve positive change in the UK charity sector.
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Education and skills
The education sector has rarely faced more risk or more opportunity to transform. You need to plan for the future.
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Social housing
We are committed to helping change social housing for the better, and can help you make the most of every opportunity.
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Technology
We work with dynamic technology companies of all sizes to help them succeed and grow internationally.
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Telecommunications
Take all opportunities to realise your goals in telecommunications: from business refresh to international expansion.
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Media
Media companies must stay agile to thrive in today’s highly competitive market – we’re here to support your ambitions.
Below is a summary of recent developments in financial reporting, corporate governance, narrative reporting and audit. You will find more detail within each heading, together with useful links to more information.
Recent developments
FRC Annual Review of Corporate Governance and Reporting 2017/2018 published
The Financial Reporting Council (FRC) has published their Annual Review of Corporate Governance and Reporting 2017/18 and an open letter to Finance Directors and Audit Committee Chairs calling for improvements in key areas of corporate reporting.
Key areas identified for improvement include reporting of critical judgements and estimates, and the elimination of basic errors in the annual report and accounts. The Annual Review sets out the issues most commonly raised by the FRC in their reviews of annual reports, with the disclosure of judgements and estimates continuing to be at the top of the list. Other commonly raised issues include:
- Alternative Performance Measures (APMs)
- the Strategic Report
- income taxes
- revenue
- business combinations
- impairment
The FRC also set out what they expect to see in accounts for years ended 31 December 2018 in respect of the adoption of IFRSs 9 (Financial Instruments) and 15 (Revenue from Contracts with Customers), and disclosure of the expected impact of IFRS 16 Leases.
Other topical areas of reporting are also highlighted, including:
- Britain exiting the EU
- complex supplier arrangements
- risk and viability reporting
- the Strategic Report
- Alternative Performance Measures (APMs)
More information, including links to both the letter and the Annual Review of Corporate Governance and Reporting 2017/18, is available on the FRC website.
FRC publishes thematic review findings on IFRS 9 and IFRS 15 company disclosures
The Financial Reporting Council (FRC) has published two thematic reviews to help companies improve the quality of their corporate reporting in relation to the new accounting standards IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments.
The reports analyse the disclosures in a sample of companies’ June 2018 interim reports in relation to the adoption of the new standards and provide examples of better practice in explaining their effect. The FRC notes that it expects other companies to use these examples to benchmark their own disclosures in upcoming reports and accounts.
The FRC has encouraged companies to invest sufficient time during their year-end preparation to ensure that transition disclosures are comprehensive and company-specific and note that they will challenge companies who do not provide an adequate level of disclosure about the impact of the new standards.
IFRS 15
In respect of IFRS 15 key findings include a number of areas where disclosures could be improved. For example, information about transition adjustments recognised, explanation of the changes made to accounting policies and information about performance obligations, a new concept introduced by IFRS 15, including judgements made in determining performance obligations and when they are considered to be satisfied.
IFRS 9
In respect of IFRS 9 the FRC highlights for improvement the quantification of the effect of estimation uncertainty in measuring expected credit losses and disclosure of the sensitivity of the amounts to changes in assumptions and estimations and / or a range of reasonably possible outcomes and evidence of consideration of the potential impact of the new standard, even where it does not have a material effect.
The reviews can be accessed from the FRC website.
FRC publishes thematic review – reporting by smaller listed and AIM quoted companies
The FRC has issued a report which looks at certain aspects of reporting by smaller listed and AIM quoted companies. The FRC reviewed the reports and accounts of 40 companies to consider:
- Alternative Performance Measures (APMs) and Strategic Reports;
- pension disclosures
- accounting policies, including critical judgements and estimates
- tax disclosures
- cash flow statements
The topics were selected from previous FRC thematic reviews, which focused on larger companies, and other aspects identified through the FRC’s regular monitoring activity.
While the review identified some better examples of smaller companies’ disclosures, it also identified several areas requiring improvement. Companies should provide more specific disclosures of significant accounting judgements and more quantitative information on key sources of estimation uncertainty. The FRC also found that companies could do more to ensure that the classification of cash flows complies with IAS 7 Statement of Cash Flows and that all sections of the report present APMs in a balanced and transparent manner.
The report contains a helpful ‘reminders’ section which can be used as an aide memoir to assist companies in considering the requirements of the Companies Act and relevant IFRSs.
The report can be accessed from the FRC website.
FRC thematic reviews of corporate reporting for 2019/20
The FRC has stated its intention to continue analysis of the adoption of IFRS 15 (Revenue from Contracts with Customers) and IFRS 9 (Financial Instruments). They will perform follow-up reviews on companies’ disclosures around revenue and financial instruments, and their impact, in a sample of annual reports. The assessment will cover companies’ compliance with the more extensive set of year-end disclosure requirements. In addition, the FRC will also undertake thematic reviews of:
- impairment of non-financial assets
- the effect of the new IFRS on leases in companies’ 2019 interim accounts
- the effects of the decision to leave the EU on companies’ disclosures
Samples will be selected from those sectors which are more heavily impacted by the new reporting requirements. The FRC will select companies for its impairment review predominantly from sectors of the economy that are currently under pressure. It will also review the accounts of those for whom circumstances and events in the current year indicate that impairment may be a significant matter. Some, but not all, companies in the sample will be pre-informed of the review.
The FRC will also conduct a focused review of the information reported in June 2019 interim reports of a number of companies, focusing on industries where the adoption of the new standard, IFRS 16 Leases, may have a material effect.
FRC publishes factsheets on FRS 102
The FRC have issued a suite of staff factsheets on aspects of FRS 102, including the 2017 triennial review. The factsheets are intended to assist stakeholders by highlighting certain requirements of FRS 102.
The factsheets cover the following topics and can be accessed from the FRC website:
Fact Sheet 1 - FRS 102: Triennial Review 2017 Amendments
Fact Sheet 2 - FRS 102: Triennial Review 2017 Transition
Fact Sheet 3 - FRS 102: Illustrative Statement of Cash Flows
Fact Sheet 4 - FRS 102: Financial Instruments
Fact Sheet 5 - FRS 102: Property: Fair Value Measurement
Fact Sheet 6 - FRS 102: Business Combinations
Fact Sheet 7 - FRS 102: Transition to FRS 102
IASB clarifies its definition of material
The IASB has issued amendments to its definition of ‘material’ making amendments to IAS 1 (Presentation of Financial Statements) and IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors).
The amendments are a response to findings that some companies experienced difficulties using the previous definition when judging whether information was material for inclusion in the financial statements.
Previous definition: Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make on the basis of the financial statements.
New definition: Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.
The changes are effective from 1 January 2020, but companies can decide to apply them earlier.
The amendments have not yet been endorsed by the EU.
The press release can be found on the IASB website.
IASB amends definition of business in IFRS 3 (Business Combinations)
The IASB has published definition of a business, amendments to IFRS 3. The amendments are effective for business combinations which occur in the first annual reporting period beginning on or after 1 January 2020. Early adoption is permitted. The amendments have not yet been adopted by the EU.
The amendments include a revised definition of a business.
Previous definition of a business: An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other economic benefits directly to investors or other owners, members or participants.
New definition of a business: An integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or generating other income from ordinary activities.
The amended definition emphasises that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others.
The amendments also include those which will help an entity in determining whether it has acquired a business or a group of assets.
The press release can be found on the IASB website.
FRC Financial Reporting Lab (the Lab) news
Reporting on the sources and uses of cash
The Lab is calling for investors and companies of all sizes to participate in a new project.
Following on from the Lab’s reports on risk, viability and dividend policy this project will explore best practice disclosures around the sources and uses of cash. It will consider how reporting on the location, nature and availability of cash within a group, as well as future uses of cash, can be presented in a way that is most useful to investor decision-making.
More details can be found on the FRC website.
Artificial intelligence and corporate reporting
The Lab has published the latest in its series of reports looking at how technology might impact the production, distribution and consumption of corporate reporting. The report explains what artificial intelligence is, where its use might make sense in corporate reporting, and explores some of the possible and current use cases for the technology.
The report can be accessed from the FRC website.
The Wates Governance Principles for large private companies
Governance principles and guidance have been published for large private companies. The principles and guidance are intended to help large companies comply with legislation that requires companies of a significant size to state in their directors' reports whether and how they follow a code of corporate governance. The relevant legislation is the Companies (Miscellaneous Reporting) Regulations 2018 which applies for financial years commencing on or after 1 January 2019. Companies will be able to adopt the Wates Principles as an appropriate framework when making a disclosure about their corporate governance arrangements under the new reporting requirement.
A company that adopts the Wates Principles should follow them using an ‘apply and explain’ approach in a way that is most appropriate for their particular organisation. Accordingly, boards should apply each Principle by considering them individually within the context of the company’s specific circumstances. They should then be able to explain in their own words how they have addressed them in their governance practices.
The Principles address purpose and leadership, board composition, director responsibilities, opportunity and risk, remuneration and stakeholder relationships and engagement. Each Principle is supplemented with guidance.
The Principles can be accessed from the FRC website.
FRC Financial Reporting Lab (the Lab) publishes guidance on the presentation of performance metrics
The Lab has released phase two of its report on performance metrics.
The guidance, 'Performance metrics - principles and practice', includes examples of how companies can apply the principles outlined in the Lab’s earlier phase 1 project report, 'Performance metrics - an investor perspective', published in June 2018.
The five principles identified for reporting performance metrics are that they are:
- aligned to strategy
- transparent
- in context
- reliable
The latest version of the report provides details around how companies understand these principles and how they can ensure they appropriately address the needs of users in relation to reporting performance metrics.
The report can be accessed from the FRC website
Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018
On 9 November 2018, the Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018 were published.
The regulations amend the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 and the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008 to require additional reporting on emissions, energy consumption and energy efficiency action by quoted companies, large unquoted companies and large LLPs.
The regulations will come into force on 1 April 2019 and have effect in respect of financial years beginning on or after 1 April 2019.
The legislation can be accessed from the Government website.
FRC Lab implementation study: business model reporting, risk and viability reporting – where are we now?
The FRC Lab (the Lab) have issued a report which considers how business model and risk and viability reporting has changed since the Lab published its original reports on these areas in 2016 (business model reporting) and 2017 (risk and viability reporting). The Lab notes that whilst there have been some good developments, investors continue to emphasise the need for reporting to be more consistent and clearly linked throughout a company’s annual report. Investors value disclosures that tie business model, strategy, risk and viability together to enable them to assess progress against strategy and management.
The report includes examples of current practice that demonstrate where companies have enhanced the value of their disclosures.
The report can be accessed from the FRC website, as can copies of the earlier reports referred to above.
FRC audit quality thematic review
The FRC have issued the results of a thematic review looking at auditors’ work on Other Information in the annual report. The Other Information is all financial and non-financial information included in an entity’s annual report other than the financial statements and the audited parts of the directors’ remuneration report. Other Information includes the strategic report, the directors’ report, the corporate governance statement and the directors’ remuneration report. This information is helpful to investors in assessing a company’s future prospects.
The FRC note that the nature, extent and quality of the work performed by audit teams on the Other Information vary considerably both between and within audit firms. While the FRC identified instances of good practice in the audits that it reviewed, there were too many instances where insufficient work was performed to support the statements made by auditors in respect of the Other Information in their audit reports.
The key message is that auditors must improve the extent and quality of the work they perform on the “front end” of annual reports. Key areas for improvement include the directors’ fair balanced and understandable statement, principal risk disclosures, the viability statement, KPIs and the directors’ remuneration report.
The report can be accessed from the FRC website.
FRC announces 2019/20 audit areas of focus
The FRC has announced the 2019/20 audit thematic reviews, priority sectors and audit areas of focus. The key audit areas of focus are going concern and the viability statement, the other information in the Annual Report, long term contracts and the impairment of non-financial assets.
The thematic review topics are audit quality indicators and the use of technology in audits.
Priority sectors are those considered by the FRC to be particularly high risk in terms of corporate reporting and audit by virtue of particular economic or other pressures. Priority sectors in 2019/2 include general retailers and retail property, business support services and construction and materials.
The full announcement can be accessed from the FRC website.
FRC withdraws Practice Note 25 (Attendance at Stocktaking)
The FRC has withdrawn Practice Note 25 (Attendance at Stocktaking). This is because much of the content is covered by application material in ISA (UK) 501 Audit Evidence – Specific Considerations for Selected Items and other ISAs (UK).
CMA statutory audit market study
The Competition and Markets Authority (CMA) is carrying out a market study into the statutory audit market, to see if the market is working as well as it should. In December 2018, following earlier consultation and analysis of the audit sector, the CMA published an update paper in which it outlined serious competition concerns and proposed remedies to improve the audit sector. The deadline for views on the proposals outlined in the paper was 21st January 2019, following which a decision on recommendations to be made to Government will be made.
The update paper, as well as other documents relating to the market study can be accessed from the Government’s website.