ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International acts as the coordinating entity for the overall benefit of the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø organization. It facilitates audit quality across the organization by establishing common policies, processes and standards to be applied across member firms.
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International structure and governance
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø is a global organization of professional services firms providing audit, tax and advisory services. ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø is the brand under which the member firms of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International Limited (â€�ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Internationalâ€�) operate and provide professional services.
Each firm is a separate legal entity and together they form the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø global organization. “ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍøâ€� is used to refer to individual member firms within the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø organization or to one or more member firms collectively.
In many parts of the world, regulated businesses (such as audit and legal firms) are required by law to be locally owned and independent.
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø member firms do not, and cannot, operate as a corporate multinational. ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø member firms are generally locally owned and managed. Each ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø member firm is responsible for its own obligations and liabilities.
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø member firms â€� legal structure and relationship with ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International - Governance
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International’s governance bodies are comprised of the Global Council, the Global Board (including its Committees), the Global Management Team and the Global Steering Groups. Further detail on each of these is set out below.
ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International Governance Bodies
As set out above, as of 1 October 2020, the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International Governance Bodies and their functions are as follows:
The Global Council focuses on high-level governance tasks and provides a forum for open discussion and communication among member firms.
The Global Council elects the Global Chairman and also approves the appointment of Global Board members. It includes representation from 56 ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø firms.
The Global Board is the principal governance and oversight body of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International. The key responsibilities of the Global Board include; approving strategy, protecting and enhancing the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø brand, overseeing management of and approving policies and regulations. It also approves the admittance or termination of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø firms to/ from the global organization.
It is led by the Global Chairman, Bill Thomas, who is supported by the Executive Committee, consisting of the Global Chairman, the Chairman of each of the three regions and a number of other member firm Senior Partners. The list of Global Board members, as at 1 October 2020 is set out at our leadership page.
One Global Board member is elected as the lead director by those Global Board members who are not the Global Chairman, Global Deputy Chairman or members of the Executive Committee of the Global Board. A key role of the lead director is to act as the liaison between those board members who are not members of the Executive Committee of the Global Board and the Global Chairman with respect to issues raised during Executive Sessions of the Global Board.
The Global Board is supported in its oversight and governance responsibilities by several committees, including:
- Executive Committee;
- Governance Committee;
- Global Quality, Risk Management & Reputation Committee;
- Global Audit Quality Committee.
The overarching responsibility of the Global Audit Quality Committee is to strive for globally consistent audit quality across all firms and to oversee those ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International activities that relate to improving and maintaining the consistency and quality of audits, assurance engagements and the system of quality management provided by ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø firms. The Global Head of Audit and the Global Head of Audit Quality provide regular reports to the Global Audit Quality Committee.
The Global Board has delegated certain responsibilities to the Global Management Team. These responsibilities include promoting the global strategy by working together with the Executive Committee, and jointly recommending the global strategy to the Global Board for its approval. The Global Management Team also supports ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø firms in their execution of the global strategy and ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International decisions and policies by member firms, including by holding them accountable against their commitments.
The list of Global Management Team members is available in the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Global Review and on the leadership section of the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø website.
The Global Head of Quality, Risk and Regulatory, Paul Korolkiewicz, is a member of the Global Management Team and has global responsibility for ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø’s system of quality controls, risk management, and ethics and compliance programs.
The Global Steering Groups represent the function and infrastructure groups of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International and are the main driving groups of the organization’s governance. They act under delegated authority from the Global Board and oversight by the Global Management Team. Under the oversight of the GMT, they promote the execution of the global strategy and compliance with ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø International decisions and policies by member firms. In particular the Global Audit Steering Group, Global Audit Quality Steering Committee and Global Quality & Risk Management Steering Group work closely with regional and member firm leadership to:
- establish and communicate appropriate audit and quality/ risk management policies
- enable effective and efficient risk processes to promote audit quality; and
- proactively identify and mitigate critical risks to the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø global organization.
The GASG is responsible for driving the member firmsâ€� implementation of ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø’s audit strategy, including standards of audit quality. The GASG works closely with the GQRMSG in relation to quality and risk matters related to audit.
The GASG is chaired by the Global Head of Audit, and includes the Heads of Audit from 10 of the largest ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø firms, the Regional Heads of Audit, the Chief Operating Officer for Global Audit and the Global Audit Quality & Risk Management Partner.
The GAQSC is chaired by the Global Head of Audit Quality and includes: the Global Head of Audit, Global Head of Quality, Risk & Regulatory, Regional Audit Quality Leaders, country Heads of Audit Quality 10 of the largest ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø firms, Global Services Centre Leadership, International Standards Group Leadership and the Head of the Global Audit Quality Monitoring Group.
The GAQSC is responsible for:
- monitoring and driving progress in global audit quality initiatives to improve the consistency and quality of audit execution throughout the organization, including the system of quality control;
- considering audit quality matters on a organization-wide basis (including issues arising through quality performance and regulatory reviews as well as root cause analysis), with a specific focus on those issues arising from the largest member firms;
- assessing and monitoring progress across the organization on how audit quality issues are being addressed by member firms and the organization a whole; and
- making recommendations to the GASG on policy changes related to audit quality issues.
The GQRMSG is chaired by the Global Head of Quality, Risk and Regulatory and includes the Global Head of Audit Quality; the Chief Operating Officer for Global Quality & Risk Management (GQ&RM); the Global Heads of Audit, Tax and Advisory; the GQ&RM Partners for Audit, Tax, and Advisory; the Global Head of Independence; the Global Head of People; the General Counsel; and the Risk Management Partners for each of the three regions and for certain Global Board member firms.
The GQRMSG is responsible for setting quality and risk management policies and procedures for the global organization and for providing associated guidance. These are documented in the Global Quality & Risk Management Manual available to all member firms and their personnel on a web-based platform. The GQRMSG is responsible � through the Quality Performance Review (QPR), the Risk Compliance Program (RCP), Global Compliance Reviews (GCR) and Area Quality and Risk Management Leaders (ARLs) � for monitoring:
- member firm compliance with GQRM policies, processes and system;
- proactive identification and mitigation of significant professional services risks faced by member firms; and
- performance of member firm professional services to drive and help ensure consistent high-quality work globally.
The Global Head of Quality, Risk and Regulatory appoints ARLs who serve a regular and ongoing monitoring and consultation function to assess the effectiveness of a member firm’s efforts and processes to identify, manage and report significant risks that have the potential to damage the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø brand.
Significant activities of the ARL, including member firm issues identified and related member firm response/ remediation, are reported to GQ&RM leadership.
The objectives of the ARL role are to:
- assist GQ&RM leadership in the monitoring of member firms� quality and risk activities;
- work with GQ&RM leadership and the International Office of General Counsel (IOGC) when significant brand and legal risk issues occur to assist in ensuring that matters are handled effectively; and
- monitor the effectiveness of member firm remediation of significant issues, including identification of the root cause(s) of serious quality incidents.
