Kreston Global has today welcomed A4 GroUP, based in Slovakia, to its global network.
A4 GroUP was established in 2021 by merging two companies with more than 15 years of tradition in the market which created one of the largest consulting companies in Slovakia, providing audit, tax advisory, legal and accounting services, payroll services and specialist services such as ESG reporting and cybersecurity. It advises a range of companies and government institutions, including Bratislava’s international airport, The City of Bratislava, The Slovak Republic’s Ministry of Justice, the Supreme Court of the Slovak Republic, and the National Bank of the Slovak Republic, on multiple issues of data security. The A4 GroUP has 44 employees, and five founding partners, including Head of Advisory Julius Cincala.
A4 GroUP is rebranding as Kreston Slovakia to be able to better serve its international clients looking for global reach
Liza Robbins, Chief Executive of Kreston Global, said: “It is with great pleasure that I welcome A4 GroUP to the Kreston Global network. We are experiencing an unprecedented level of growth, a tribute to the exciting work carried out across the network in recent months and years. We will be working with our newest colleagues to build their links across the network as they explore new opportunities both at home and abroad.”
Julius Cincala, Partner and Head of Advisory at A4 Gro, said: “Kreston Global are an established presence throughout the world and as such they were our first port of call when we made the decision to build our international profile. We look forward to supporting our existing and future clients in their aspirations in the region.”
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Kreston Global announces new life sciences and healthcare sector chairs
April 26, 2022
LONDON – Kreston Global has appointed Sue Staunton and Scott Miles co-chairs of its new Life Sciences and Healthcare sector group.
The group has formed in recognition of the substantial life sciences and healthcare work carried out by Kreston firms internationally, providing a wealth of expertise to privately owned businesses and investors looking to invest and raise capital in this rapidly growing sector.
Sue Staunton is a joint managing partner of James Cowper Kreston, and Scott Miles is a corporate partner in Kreston Reeves, both UK accounting firms and members of the Kreston Global network. They will be leading an international group of sector experts from Switzerland, India, Singapore, the US, UK and Germany.
Sue qualified as a chartered accountant with a UK top six firm and held various positions within that business, culminating as National Client Service Director of their technology team, which she co-founded, before leaving to join James Cowper Kreston which has a strong Technology and Life Science cross-disciplinary specialist team which she led for many years. She provides support for Life Science businesses at all stages of their development from start-up to IPO and has significant experience in working with Government funded bodies operating within the sector such as the Vaccine Manufacturing and Innovation Centre and the Rosalind Franklin Institute as well as VC backed private companies- including a number associated with vaccine development.
Scott is the Life Science Lead Partner at Kreston Reeves, where he has developed a specialist team (supported by David Rosevear) to deliver expert services to the Life Science and Healthcare sectors. He and the team have developed significant relationships with Venture Capital organisations, Family offices, Government organisations and High Net Worth Individuals.
Scott provides support to start ups with seed funding through to Series A & B raises and onto listings. He was involved with one of the largest Life Science listings in 2021 with 10 entities being rolled up and listed. He also acted for one of the UK’s largest growing Healthcare providers and supported them with a partial exit in 2021.
2021 saw the Kreston Global network celebrating its 50th anniversary as well as undergoing its own rebrand.
Sue Staunton said:
“Kreston Global has long had an excellent profile in the Life Sciences space and with this focussed sector group we will be able to take our offering to the next level. This is an exciting time for the Life Sciences and Healthcare sector, and Kreston Global’s dynamism makes us a natural partner for clients in the space. I look forward to working with Scott to harness the strength of our global network.”
Scott Miles said:
“Kreston Global’s experience in the sector, and forward-looking ethos, mean that we are superbly well placed to offer a unique global offering to clients in the Life Sciences and Healthcare sector. I look forward to working with Sue and the other members of the group to develop our existing practice and support clients on their journeys.”
Liza Robbins, Chief Executive of Kreston Global, said:
“Sue and Scott have a wealth of experience in the sector and have already done much to develop Kreston Global’s offering. The establishment of a sector group is the natural next step to ensure that we are reaching the right audiences and offering the right services. I would like to congratulate them on their appointments and wish them well as they harness the potential of the network in this exciting area.”
This includes an interesting read on the most recent economical changes in the United Kingdom. Also, a knowledgeable insight into national insurance rises, fuel duty and taxes.
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Kreston’s Clive Owen LLP appoints new tax partner
April 19, 2022
Clive Owen LLP, chartered accountants and business advisers have appointed David Baggaley as a fifth Tax Partner at the rapidly growing firm.
David joins the firm, which has offices in Darlington, Durham, Middlesbrough, and York, from EY where he was an associate partner leading the private tax team in the North East and Yorkshire providing tax advice to both corporates and individuals.
A chartered accountant and chartered tax adviser with many years of experience in UK taxation, David spent time on secondment to EY’s offices in Bangalore, India and Edinburgh gaining valuable knowledge. He also has a keen focus on business development through networking.
Across the four offices currently, the firm now employs 117 people. The Clive Owen tax team has four tax partners, nine fully qualified chartered tax advisers and four trainee-chartered tax advisers, within the 17 strong team, making it one of the largest independent tax teams in the region. In addition, further appointments are set to be made in the coming months to add further depth to the tax team.
Growth is something very much on the agenda for the firm. They opened their fourth office on Riverside Park in Middlesbrough earlier this year with a 20-strong team at the 3,000 square foot site. The new office will provide more space to grow the business across the Tees Valley where they already have a significant number of existing clients and an appetite to develop further.
David Baggaley said:
“I am very pleased to be joining such a well-respected firm as Clive Owen. The firm has an entrepreneurial client base which I know I will very much enjoy working with.”
“It is a very exciting time for Tees Valley with Freeport status and the Treasury and other Government departments which are relocating part of their functions to Darlington. Clive Owen is very well placed to take advantage of the resurgence of the area, and I am looking forward to playing my part in this.”
Gary Ellis, managing partner said:
“David is an exceptional appointment who will further strengthen our excellent tax team. The firm has won a significant amount of new client work and seen an increase in demand from existing clients for tax advisory projects including re-organisations, R&D tax relief claims and inheritance tax advice and a tax partner of his calibre will help support the firm as we drive further growth.
I’m delighted to welcome David to the Clive Owen team at such an exciting juncture for us. His expertise and experience will be an asset as we develop the partnership going forwards”
News
Kreston Ukraine plans for the future
April 17, 2022
The Marshall plan initiative, created by members of Kreston Ukraine, is a critical part of economic recovery. A robust strategy will give the economy a chance to recover when the war one day comes to an end.
Liza Robbins, Chief Executive, Kreston Global and Sergey Atamas, Managing Partner, Kreston Ukraine report.
News
Andrew Collier
Director, Quality Control and Professional Standards, Kreston Global
Andrew is an experienced qualified chartered accountant who specialises in the technical and quality aspects associated with professional services in an international environment.
Andrew previously held the role of Technical Manager at RSM International and is proactively involved with several industry bodies as a member of the ACCA Global Audit Forum and The Transnational Auditors Committee (TAC).
Investigation into preserving audit independence
April 14, 2022
Andrew Collier our Director of Quality and Professional Standards, Kreston Global comments regarding whether audit firms should be prevented from cross-selling consultancy services to audit clients. Read here.
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Kreston Global welcomes new events manager to the team
April 12, 2022
We are delighted to welcome Nicoletta Iodice, who joined us recently as the events manager. This important role was created in response to several developments, including the move to hybrid events and return to more in-person events, an ambitious event schedule to accommodate a growing need and our focus on ESG. Nicoletta will manage the full Kreston event programme and strategy. Nicoletta comments,
“I am Italian, but I have been living in London since 2014 delivering worldwide events for membership organisations – from exclusive dinners to conferences, summits, and award ceremonies. I thrive in multicultural and diverse environments where I can learn something new every day and get to know different people and cultures. I am still very fussy about my pizza, but also love Sunday roasts, Scotch eggs and absolutely adore any type of dumpling – from pierogi to gyoza. Sustainability is very important to me and I look forward to contributing to Kreston Global’s purpose by improving our events’ environmental impact.
With its global scope, diverse membership and focus on positive impact, Kreston seems like the perfect organisation for me and I am very excited to be part of this Global network.”
News
Theo Theodoulou
Chair of Kreston Global Audit Group and Audit and Assurance Director at Kreston Ioannou and Theodoulou.
Theo is a non-executive board member of the Cyprus Securities and Exchange Commission (CySEC), and leads the Audit Committee of CySEC. In 2018, he was appointed as the Finance Director of one of the biggest football clubs in Cyprus, Anorthosis Famagusta (Football) Public Limited.
Theo’s portfolio covers M&A due diligence, investment appraisals, forensic audit, internal audit and risk management advice, as well as corporate governance best practice.
Can auditing avoid shareholder disputes?
April 1, 2022
Recently, one of the leading UK restauranteurs, Corbin and King, was driven into administration by the majority investors, following an ongoing shareholder dispute. This has resulted in Corbin and King losing control of the group in a late-night auction, where Minor International bought the business.
The dispute originated from the fundamental difference in the shareholders’ perception of whether the group was a going concern business or not. It raises an interesting case study into what extent the audit process could have been able to prevent a dispute from arising.
The independent auditor of the group cannot intervene in shareholder disputes, however, under international auditing standard 570 an auditor has the responsibility. An auditor must question the appropriateness of the management’s use of the going concern assumption in the preparation of the financial statements. The auditor must then conclude, based on the audit evidence, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern considering also the implications this would have on the auditor’s report.
The challenge of the going concern assessment for the auditor of Corbin and King becomes greater taking into consideration the unprecedented times of the pandemic, particularly in the food and beverage industry, where many businesses throughout the world did not manage to survive and others are still facing the consequences.
The questioning from the auditors of Corbin and King on the management’s assumptions could be a form of leverage to potentially diffuse or avoid shareholder disputes, but this alone could potentially not suffice.
Audit evidence required that could put some form of leverage on the management
Financial projections and budgets
The auditor should have been provided with cash flow projections and budgets covering at least the period used by the management on their going concern assessment at a minimum, but not limited to 12 months as per international accounting standard 1. The financials should consider how the current events impact the company’s operations and projected cash flows. The auditor should be able to assess the assumptions used and stress the scenarios provided especially the downside scenario.
Has the management of Corbin and King reflected in their projections the impact of lockdown events? Have they reviewed projected covenant compliance in different cash flow scenarios? In case of non-compliance, how did this impact their current and non-current liabilities? Have they properly disclosed the liquidity risks? These and many other questions would be a form of leverage used during the audit process.
Looking for key events
The auditor should look for significant events and evidence that could support the management’s assumption ongoing concern assessment or question these assumptions.
In the case of Corbin and King, a start would be the board minute resolutions and decisions of the board of directors and to focus on the claim from the Minor group that the company was unable to meet its financial obligations. It appears that the company was in negotiations for financing with a US-based investment fund Knighthead Capital Management. There may have been proposals by the majority shareholders to recapitalise the company, something that could have had an impact on the dilution of existing shareholding and potential issues in the decision making of the company. Was this evidenced during the board meetings? What was the reaction of executive and non-executive members of the board? What were the decisions throughout this process and how do they reflect the stand of the shareholders? Were the decisions supported by financial plans and projections?
In addition, the company appeared to be in a fall with their insurers AXA over losses incurred during the pandemic and entered into litigation against them. The auditor would be able to get a legal update directly from the legal advisors and understand the possibilities of winning the case and whether potential benefits would flow to the company and in what timeframe. In this case, what were the management’s reactions and feedback? Has this been properly accounted for in the financial projections?
These and potentially other key events while assessed by the auditor require also the management to enter into an exchange of opinions and discussion during the audit process and could be used as a form of leverage on the shareholders’ dispute.
Conclusion
During the audit process, the auditor will perform various procedures and will request evidence as well as will question assumptions provided by the management on the going concern assessment. The overall process could be considered as a form of leverage and could trigger a mechanism that could potentially diffuse or avoid potential conflicts however this is not considered a principle and should not be an expectation from an independent external auditor.
If you would like audit support to avoid shareholder disputes, please contact us below.
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