1. Introduction
The statutory audit directive of the EU requires that firms auditing financial statements of public interest companies publish on their website a transparency report for each calendar year. This EU requirement was implemented in the Maltese Accountancy Profession Act during 2008 by article 18.
This transparency report has been prepared in accordance with the provisions of article 18(1) of the Maltese Accountancy Profession Act and covers the firm’s operations for the year 2023.
This report, which is intended to meeting the expectations of all stakeholders, outlines our firm’s governance and quality structure, together with ongoing initiatives meant to ensure that quality remains embedded in our culture. We serve a number of clients in several industries including professional services, retail, manufacturing, education, health, iGaming and maritime. Whatever the industry, our goal as a Certified Public Accounting practice, stays unchanged; supporting our clients with supreme quality audit services based on our knowledge of the business and the industries in which they operate.
2. Managing Director’s Message
The annual Transparency Report serves as an invaluable platform to present a comprehensive account of our performance and achievements in the past year. It provides an opportunity to reflect on our progress and to share our successes with our esteemed clientele and the wider public.
The year 2023 marked an impressive milestone for Griffiths + Associates, reaffirming our commitment to providing comprehensive and robust services across our two core areas:
Griffiths + Associates Advisory Ltd, which offers corporate service provisions including accounting and tax advisory services.
Griffiths + Associates Ltd, dedicated to handling the audit facets of the business.
Our most notable achievement in 2023 is the substantial increase in the number of specialized audits within niche sectors, a testament to our unwavering commitment to providing top-tier services to our clients.
In the GAMING sector, following amendments to the Approved Audit Service Provider Policy by the Malta Gaming Authority, Griffiths + Associates Ltd earned official recognition as an approved ‘Statutory Auditor’. Our technical expertise and deep understanding of the MGA’s requirements place us in a unique position to deliver beyond conventional audits, providing effective mitigating measures where necessary.
Our impeccable reputation is a direct result of our enduring work ethic and deep-seated knowledge of this specialized industry. Our team of experienced CPAs constantly stays abreast of the latest industry regulations to deliver high-quality service.
In the PENSION SCHEMES sector, we are one of the few Auditors approved by the MFSA to audit retirement schemes. Our dedication to excellence and compliance has allowed us to audit retirement scheme administrators and personal retirement schemes since 2019. We possess an in-depth understanding of this niche field, with in-house expertise in risk management, governance, internal audit, investment valuation services, de-risking solutions, and comprehensive tax services.
As for GOVERNMENT INSTITUTIONS & EU FUNDED PROJECTS, we have successfully secured several government tenders in 2023, serving as an External Auditor and a First-Level Controller for EU funded projects.
In 2023, we also continued to evolve our ESG and sustainability priorities. The pandemic year instigated a shift in our work style – from a traditional office-based operation to a flexible hybrid model, promoting work-life balance. As a member of Prime Global, we fully participated in the WORKATION initiative “Combine Work and Leisure”. This unique arrangement offered us the opportunity to forge global professional relationships and expand our horizons.
As we reflect on the achievements and challenges of 2023, we eagerly anticipate what 2024 holds for us. The next year marks our 20th anniversary, a significant milestone that we hope will be accompanied by continued growth and opportunities for our team members.
Peter J. Griffiths
Managing Director,
April 2024
3. Legal Structure and Ownership
Griffiths + Associates Ltd is a limited liability company incorporated in Malta under the Companies Act 1995 Chapter 386 of the Laws of Malta (Reg. No: C 58472). The address of its registered office is Level 1, Casal Naxaro, Labour Avenue, Naxxar, NXR 9021.
As a firm holding a license to practice as an audit firm from the Malta Accountancy Board in terms of the Accountancy Profession Act (Ref. AB/26/84/110), it provides audit and assurance services.
Non-assurance services including business advisory, corporate services and transaction services, accounting, and payroll, are provided principally through the related company, Griffiths + Associates Advisory Ltd, which is a limited liability company registered in Malta (Reg. No: C 48041, Directors: Peter Griffiths with 76% shareholding, and Anton Magro with 24% shareholding).
Griffiths + Associates is a member of Prime Global.
PrimeGlobal is an award-winning association of independent and business advisory firms, comprised of over 300 highly successful independent member firms with a combined annual revenue of more than US$3.9 billion. PrimeGlobal`s independent member firms house a combined total of more than 3.000 partners and 28.000 employees. PrimeGlobal continues to have a greater geographical reach than any other top ten association, with nearly 940 locations spanning 100 countries.
4. Governance and Management
The equity of Griffiths + Associates Ltd and the voting rights are held by the sole shareholder – Mr Peter J. Griffiths.
The firm is managed by a Board of Directors whose role primarily is to provide direction to the firm. The Board directs the mission, vision and goals of the firm and ensures that the corporate values are adhered to. Directors and managers convene on a regular basis to discuss management and finance matters, human resources and the overall direction and priorities of the firm. They consistently and systematically assess and ensure the firm’s practices are fully compliant with the provisions of the Accountancy Profession Act and all other relevant legislation.
All salaried directors receive an agreed remuneration package that is commensurate to their position and responsibilities. None of the directors is remunerated on the basis of fees generated by a particular client or group of clients, or by the provision of particular services.
5. Internal Quality Control and Independence
5.1. Quality assurance, risk management and ethics
The firm has a commitment to quality which we consider indispensable in order to build and reinforce public trust and client endorsement.
The firm’s system of quality management (SOQM) has been designed during 2022, in accordance with the requirements of ISQM 1. A “System of Design of Quality Management within Griffiths + Associates Ltd” has been prepared in accordance with Guidance Note 04/22 issued by the Malta Institute of Accountants.
The firm believes that its internal quality control system functions at a suitable level of effectiveness for a firm of its size. It is also committed to constantly and steadily improve internal policies and procedures as the mentioned system does not operate in a linear manner but needs to be kept going over and over again and changed according to circumstances.
- Responsibility for quality within the firm:
he firm’s management team is responsible for maintaining the highest quality standards in every area serviced by the firm. This includes, but is not limited to, compliance with the requirements of International Standard on Quality Management 1.
The Principal in charge of compliance within the firm is Mr. Peter J. Griffiths and has been chosen to fulfil this role in view of his over twenty years’ experience in the auditing field.
The following persons are eligible to sign off audit reports issued by the firm:
Managing & Tax Director: Peter J. Griffiths
Audit Director: Alexander Micallef
Audit Director: Jason Stivala
- Risk management:
The firm only accepts or continues an engagement provided that the client concerned does not lack integrity and that the firm is competent to perform the services required in compliance with the relevant ethical requirements.
Before accepting a new client, the prospective client is assessed to ensure that any risks of proceeding with the engagement are deemed acceptable according to our Customer Acceptance Policy.
If a potential conflict of interest is identified in accepting (or continuing) an engagement from a new (or existing) client, the firm shall determine whether it is appropriate to accept the engagement.
The risk-based approach hinges on two aspects: an understanding of the risks one is facing and, based on this understanding, the variation of one’s controls, policies, measures and procedures to achieve the strongest mitigating effect possible. This calls not only for an understanding and assessment of risk that one’s business is in general exposed to (business risk assessment), but also for a more specific assessment of the risk to which a subject person will be exposing themselves to when establishing individual business relationships or carrying out a given occasional transaction (customer risk assessment).
- Ethical requirements:
The firm ensures that it follows the requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the IESBA Code and the national ethical requirements emanating from the Code of Ethics for Warrant Holders. The firm provides appropriate training to directors and audit staff members on a regular basis to ensure compliance with such ethical requirements.
Statement on the effectiveness on the quality management system
Our quality management system is designed to provide reasonable assurance that the Company, its directors and staff comply with professional standards and regulatory and legal requirements, that work is performed to a consistently high standard and that reports issued by the Company are appropriate.
5.2. Monitoring Audit Performance
- Engagement performance.
Common methodology:
The firm’s ISQM 1 Manual sets out the policies and procedures in place for performing audits, together with practical guidance during engagements.
The firm’s policies and procedures are designed to ensure that audits meet all applicable professional standards and regulatory requirements and that the firm issues reports that are appropriate in the circumstances. To achieve this and to ensure consistency in the approach to auditing and related fundamental application of professional skepticism, Griffiths + Associates has developed the audit methodology compliant with International Auditing Standards, related software tools and other standard forms of documentation.
- Monitoring.
The firm’s system of quality management procedures is subject to a review on an annual basis. All deficiencies arising from this review and any associated file reviews are acted upon and any corrective action to the system made. No issues have yet been raised which we believe have a material impact on the conduct of our statutory audit business through our review methodology and which is conducted on an annual basis.
The firm also appoints an independent external reviewer to conduct a review of completed audit engagements on an annual basis.
The firm is also subject to reviews by the Quality Assurance Unit, set up within the Accountancy Board of the Ministry for Finance of Malta. The most recent review by the Quality Assurance Unit was carried out between June and September 2020. The scope of the visit was to review the quality control system of the firm together with the compliance testing of procedures and the files to assess its adequate functioning. The firm received the final copy of the quality assurance review report during the last quarter of 2020. Griffiths + Associates Ltd confirmed its high standards of internal quality control.
5.3. Independence procedures
The firm maintains internal policies and procedures to ensure that it maintains independence from its clients and that conflicts of interest are dealt with appropriately and on a timely basis. All members of staff and directors complete annually an independence form confirming their independence and compliance with the firm’s policies and procedures in addition to the Code of Ethics for Warrant Holders and the IESBA Code. Furthermore, all members of staff and directors complete declarations relating to confidentiality and acknowledging of being fit and proper.
Audit directors are subject to rotation requirements limiting the number of years they may provide audit services to a listed company or public interest entity for. In addition, the firm’s audit methodology requires independence to be reassessed each year. This includes consideration of whether any non-audit services provided by the firm to our audit clients may have an adverse impact on our actual or perceived independence. As per the requirements of the Directive 2 Code of Ethics for warrant holders and the Firm’s ISQM 1 Manual of Policies and Procedures, engagement partner participation in the statutory audit of a PIE engagement shall not be later than seven (7) years from the date of their appointment. The firm’s auditors are also subject to the gradual rotation mechanism of the persons who are registered as statutory auditors on the engagement teams in accordance with Article 17(7) of the Audit Regulation (EU) No 537/2014.
We also maintain a database of all our firm’s restricted entities, including listed companies and other public interest entities. This is available on our intranet and its objective is to prevent the performance of prohibited non-assurance services or investment in these entities.
During 2023, the firm carried out the statutory audit of Class Finance P.L.C.
Statement on the effectiveness of the systems to safeguard objectivity and independence
The design, operation and effectiveness of the Company’s systems to safeguard objectivity and independence form part of the review of the quality management system. Based on the evidence identified in this review, Griffiths + Associates Ltd confirms, with a reasonable level of assurance, that the independence procedures and practices have been implemented and the system is effective in ensuring independence.
5.4. Human resources and training
Human Resources is critical for the success of our firm. To ensure that the firm upkeeps ethical and high standards, in accordance with professional and legal requirements, we continuously work on refining the following areas:
▪︎ Clear and consistent policies at which:
- The firm employs audit staff who have the relevant integrity and competencies and meet the high standards expected of the firm. Upon recruitment, a newly audit staff member is required to obtain a Police conduct certificate issued by the Criminal Records Office
- The firm retains and properly rewards individuals with the right skills and values without discriminating on age, disability, ethnicity, gender, nationality, race and religion.
The employee handbook and other guidelines, formed by taking into consideration Maltese legislation and practices in cyber security, provide clarity and coherence on company goals, structures and vision to enable employees to align with them. Every employee has access to the Manuals and they are expected to make themselves familiar with its contents and any updates which may happen from time to time.
▪︎ The firm has a policy of facilitating and encouraging continued education as an important means of developing knowledge and maintaining and improving the quality of its services and of motivating and retaining its personnel. For that purpose, the firm:
- Organises regular training sessions provided both by appropriate specialist staff within the firm, as well as by external training providers. The administration department of the firm informs the audit staff of all training sessions which are applicable to their needs by forwarding emails from the external training service providers. Internal training sessions are provided to audit staff on a regular basis so as to keep abreast on the latest developments in the auditing field. Internal training sessions are provided in the firm’s Board Room and the training participants are required to sign a training attendance form as evidence of their participation. Internal technical guidance is also circulated to audit staff members by means of emails so as to provide guidance on specific audit areas.
- Regularly monitors the compliance of personnel with minimum CPE requirements;
- Implemented certain processes such as:
- Yearly performance appraisals
- Reviews for employees under probation
- Identifies conferences/exhibitions/seminars which could prove beneficial to employees and support for employees who are interested or are already undertaking educational courses.
▪︎ Concluded an Internship Collaboration Agreement between our firm and the University of Lodz, Poland under the Erasmus+ programme is in place. Such a programme supports transnational partnerships among educational institutions and business to foster cooperation and bridge the worlds of education and work.
Statement of compliance with the professional training obligations
On an annual basis, warrant holders are required to complete at least 40 hours or equivalent learning units of relevant professional development activity, of which 25 hours or equivalent units should be verifiable.
Our Company continuously promotes the active involvement of professional staff in local and international professional accounting and auditing organisations.
6. Financial information
During the year ending 2023, Griffiths + Associates revenue totalled € 729,105 and is divided as follows:
| Revenue | Amount, € |
|---|---|
| Revenue from the statutory audits of PIEs and entities belonging to a group of undertakings whose parent undertaking is a PIE | 19,500 |
| Revenue from the statutory audits of other entities | 555,796 |
| Revenue from permitted non-audit services to audited entities | 133,435 |
| Revenue from other non-audit services to other entities | 19,374 |
The financial statements of Griffiths + Associates for the year ended 31 December 2023 are still in the process of being audited, the turnover figures presented above are preliminary and may be subject to change.
This publication has been written in general terms and should be seen as containing broad statements only, and this should not be used or relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained in this publication without obtaining specific professional advice. Please contact Griffiths + Associates to discuss these matters in the context of your particular circumstances. The publishers and/or the authors do not accept or assume any responsibility or duty of care in respect of any use of or reliance on this publication, and will deny any liability for any loss arising from any action taken or not taken or decision made by anyone in reliance on this publication or any part of it. Any use of this publication or reliance on it for any purpose or in any context is therefore at your own risk, without any right of recourse against the publishers and/or the authors.
This publication has been written in general terms and should be seen as containing broad statements only, and this should not be used or relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained in this publication without obtaining specific professional advice. Please contact Griffiths + Associates to discuss these matters in the context of your particular circumstances. The publishers and/or the authors do not accept or assume any responsibility or duty of care in respect of any use of or reliance on this publication, and will deny any liability for any loss arising from any action taken or not taken or decision made by anyone in reliance on this publication or any part of it. Any use of this publication or reliance on it for any purpose or in any context is therefore at your own risk, without any right of recourse against the publishers and/or the authors.
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April 2024 Griffiths + Associates Ltd. All rights reserved.
Published in Malta.
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