PKF Littlejohn Component Auditor Instructions

PKF Littlejohn LLP
Component auditor instructions

UIB Holdings (UK) Limited
Year ended 31 December 2018
January 2019
www.pkf-littlejohn.com
Contents
1 Component auditor instructions 1

1.1 Introduction 1
1.2 Nature of your work 1
1.3 Form of financial information 2
1.4 Reporting 2
1.5 Key contacts 2
1.6 Timetable and deliverables 2
1.7 Ethical requirements, including independence requirements 3
1.8 Materiality 3
1.9 Component risks – significant and identified 4
1.10 Instructions as to nature of work 5
1.11 Group wide controls 6
1.12 Subsequent events 7
1.13 Our expected involvement in your audit 7
1.14 Report to management 7
1.15 Communications during the course of the audit 8
1.16 Communications at the conclusion of the audit 8
1.17 Related parties 8
1.18 Access to your working papers 9
1.19 Confirmation 10
2 Component auditor planning stage questionnaire and confirmation

report 11
2.1 Information about your firm and your skills and experience 11
2.2 Planning stage responses 18
2.3 Confirmations 20
3 Audit summary memorandum 22

3.1 Summary of audit approach 22
3.2 Summary of actual financial results 22
3.3 Materiality issues 24
3.4 New accounting policies and disclosures 24
3.5 Related parties 24
3.6 Management bias 24
3.7 Summary of work performed 24
3.8 Letter of representation 35
3.9 Other matters 35
3.10 Outstanding issues 36
4 Component auditor completion questionnaire 37

4.1 Completion stage responses 37
4.2 Confirmations 45
5 Subsequent events report 46

6 Summary of component uncorrected misstatements 47
7 Summary of component corrected misstatements 48

Component auditor instructions - Year ended 31 December 2018
8 Group accounting policies 49

1 Component auditor instructions
1.1 Introduction
PKF Littlejohn LLP has been appointed as auditor of UIB Holdings (UK) Limited and as part of
the group audit we are required to consolidate the Subsidiary that you are auditing. Our role as
group auditor is to express an opinion on the Year’s financial report based on our audit.
Accordingly, we require you to furnish information to us that will enable us to provide a group
opinion for UIB Holdings (UK) Limited incorporating your Subsidiary for the Year ended 31
December 2018. The Subsidiary that you are auditing has been identified as significant in the
context of the audit of the Group.
Name of Component Audit Firm Components to be audited

Baker Tilly TFWLCL UIB Asia Reinsurance Brokers Pte Limited
DoOne Accounting Corporation (PKF) UIB Insurance Brokers Co Limited
TBC United Insurance Brokers LLC
TBC United Insurance Brokers (DIFC) Limited
Mazars UIB Nordic
PKF Istanbul – Abay Bagimsiz Denteim A.S IBS Sigorta Brokerlik
PKF Brasil UIB Re Brasil Corretora Resseguros
PKF India UIB India Private Limited
Howarth TH Liew Tong UIB Asia Labuan Limited
Control PyG Consultores S.A.S UIB Colombia S.A
Control PyG Consultores S.A.S UIB Agencia Colocadora De Seguros
These instructions include the Component Auditor Planning Stage Questionnaire and
Confirmation Report (Section 2). The purpose of that document is to obtain an understanding of
your audit of components of the group to enable us to form a conclusion on whether we are
likely to be able to rely on your work and for you to confirm certain matters to us. Your work will
be used to support the group audit opinion for the year ended 31 December 2018. As such your
work does not constitute a separate audit engagement between you and us.
Please return the completed document to: Andy Lukasevic (Auditor in charge)
The instructions set out below envisage an Audit Summary Memorandum (Section 3) and a
Component Auditor Completion Questionnaire (Section 4) being made to us at the conclusion of
your audit, and a supplementary Subsequent Events Report (Section 5) at the point we expect
to issue our audit report.
1.2 Nature of your work
You are requested to report on the financial statements and any additional information required
by the parent company for consolidation purposes, hereinafter referred to as “the Financial
Information”.
Your audit should be carried out in accordance with International Standards on Auditing (UK) as
applicable for the reporting period. If you anticipate any difficulty in complying with ISAs
(UK) please contact us immediately so that we may consider how best to deal with the
specific matters.
UIB Holdings (UK) Limited 1

1.3 Form of financial information
For our audit we require a copy of the final financial statements for each component, duly
approved by and signed by the directors and signed by your firm. If for any reason final audited
financial statements are not available by the deadline specified, please report to us in
accordance with these instructions using final draft information suitable for consolidation
purposes and specify when the signed financial statements will be available.
1.4 Reporting
Your opinion will be used by us solely for the purpose of our audit of the consolidated financial
statements.
In addition there are a number of other matters we request that you report to us as set out in the
accompanying Sections as deliverables.
If you envisage any problems in providing us with the necessary information and reports
by the deadlines specified, please contact us immediately.
1.5 Key contacts
Your key contacts at our firm are:
Partner: Carmine Papa

Email: cpapa@pkf-littlejohn.com
Direct telephone line +44 (0) 20 7516 2271
Manager: Bethanie Crayston

Email: bcrayston@pkf-littlejohn.com
Direct telephone line +44 (0) 20 7516 2378
Auditor in charge: Andy Lukasevic

Email: alukasevic@pkf-littlejohn.com
Telephone: +44 (0) 20 7516 2200
Please return the completed documents to all of the above.
1.6 Timetable and deliverables
The timetable and deliverables in relation to your audit is as follows:
Date
Receipt of completed Component Auditor Planning Stage 1 March 2019

Questionnaire and Confirmation Report (Section 2).
Receipt of Audit Summary Memorandum (Section 3). 19 April 2019
Receipt of Component Auditor Completion Questionnaire 19 April 2019

(Section 4).
Receipt of signed Audit Report and Financial Statements. 19 April 2019

Date
Receipt of Audit Findings Letter and Report to Management 19 April 2019
Receipt of Subsequent Events Report (Section 5). 26 April 2019 or if earlier the
date of signing your audit
report
Receipt of schedule of Uncorrected Misstatements exceeding the 19 April 2019

clearly trivial level (Section 6).
Receipt of Schedule of Corrected Misstatements (Section 7). 19 April 2019
Timely submission of the requested reports and documentation is essential in meeting the
group audit deadlines.
1.7 Ethical requirements, including independence requirements
It is the responsibility of each professional providing service to the group to comply with
applicable ethical and independence requirements. You are required in Section 2 to confirm that
you understand and will comply with the ethical and independence requirements, and that you
currently are not aware of any circumstances that may have threatened, or may have appeared
to threaten, your independence.
In addition, as part of our completion procedures, we will require you to confirm that you have
complied with ethical and independence requirements relevant to the audit of the group
financial statements.
You are to inform us of any violations of ethical or independence requirements relevant to the
audit of the group financial statements as soon as practicable.
1.8 Materiality
The group materiality level for the purpose of this engagement is set at £525,000. However, for
the purposes of planning your audit and designing the detailed procedures to be carried out,
you should use a component materiality level of no more than the Group performance
materiality of £420,000.
Please confirm to us in the attached Auditor Planning Stage Questionnaire (Section 2) the
materiality level you will use for your audit. Where the component is subject to a statutory audit
within its jurisdiction, please calculate your own local materiality in accordance with International
Standards on Auditing, without exceeding the figures stated above.
The level at which uncorrected misstatements are assessed as clearly trivial is £26,250.
Please report to us:
 All uncorrected potential misstatements where they exceed the clearly trivial level –
indicating in respect of each item reported whether you consider that it could be indicative of
fraud.
 Any other potential misstatement that you consider could be indicative of fraud.

 All misstatements exceeding the clearly trivial level detected as a result of your audit and
corrected by management in preparation of the financial information submitted for
consolidation.
 All disclosure deficiencies.
1.9 Component risks – significant and identified
We have identified the following significant risks which we believe are relevant to the audit of
the group financial statements:
Related account
Description of balance/class of
Significant risk significant risk transaction/disclosure Assertion(s)
Income There is a risk of non Income and AC, CF, EX

recognition – compliance with the group’s Debtors/Creditors
recognition of accounting policy on revenue
insurance recognition.
broking income
Management There is a risk that Trial Balance AC, EX

override of management can override
controls controls.
Completeness There is a risk that insurance Income and AC, CP, EX

and accuracy of broking transactions and Debtors/Creditors,
insurance balances are not completely Bank and Cash
broking and accurately recorded in the
transactions and accounting systems.
balances
The existence There is a risk that inter group Intra-Group balances AC, CF, CL, CP,
and disclosure of and related party transactions and consolidations, EX, OC.
inter-group are not authorised and Disclosures
transactions disclosed.
(including loans,
guarantees and
letters of
support) and
other related
party
transactions
Aged and bad There is a risk that aged Intra-Group balances AC, CF, CL, CP,
debts debtor balances are not and consolidations, EX, OC, EX, VL
recoverable. Income and
Debtors/Creditors
Funding There is a risk that balances Debtors CL, EX, VL

are being funded without
designated authorisation and
balances which are funded are
not recoverable.

Unmatched cash There are two risks with the Income and AC, CP, OC
unmatched cash: Debtors/Creditors
1) Unmatched cash will
have an impact on the
integrity of the
insurance debtor and
creditor balances.
2) If you are operating
under the client
money rules in your
jurisdiction,
unmatched cash will
drawdown of realised
commission/brokerage
in respect of any client
money calculation
performed.
Compliance with There is a risk of non

all group compliance with group
accounting accounting policies. We refer
policies you to section 8 for group
accounting policies.
Going concern There is a risk that the entity

may not be a going concern.
Deferral of There is a risk that where the Income and Creditors AC, EX, CL
income to meet company has post placement
post placement obligations in respect of
obligations handling claims, an element of
income is not deferred to meet
the costs of these post
placement obligations.
Please return, in the attached Component Auditor Planning Questionnaire, any additional
significant risks you have identified as relevant to your audit.
In respect of the significant risks, please indicate in the attached Component Auditor Planning
Questionnaire what your audit response will be in order to address all significant risks.
The results from testing all significant risks (including those listed in the table above and those
in the Component Auditor Planning Questionnaire) should be communicated to us upon
completion of your audit procedures using the Audit Summary Memorandum.
1.10 Instructions as to nature of work
You should carry out an audit of the financial statements in accordance with International
Standards on Auditing. In doing this, please ensure you carry out the following specific
procedures:
Income recognition:

- Carry out analytical reviews of income;
- Substantive testing by selecting sample of transactions ang agreeing them back to
supporting documentation and the ledgers;
- A review of post year end receipts to ensure completeness of income recorded in the
accounting period.
Management override of controls:

- Perform journal testing for the sample of journals posted in the year and at the year end
with a particular emphasis on the manual journal entries and journals that appear to be
outside the normal course of business for the Company.
Completeness and accuracy of insurance broking transactions and balances:

- Review the insurance debtor ageing at year end and ensuring that balances are
recoverable and that any provisions are appropriate and materially correct;
The existence and disclosure of inter-group transactions (including loans, guarantees

and letters of support) and other related party transactions
- Review the disclosure with regards to the intra-group transactions to ensure that all related
party transactions have been identified, authorised and disclosed in the financial
statements;
- Review the disclosure with regards to the intra-group transactions and assess it based on
your knowledge of the company.
Aged and bad debts

- Review the basis and accuracy of any bad debt provisions made;
Funding/Unmatched cash
- Review funding and unmatched cash reports at year end for evidence of any irrecoverable
amounts;
Compliance with all group accounting policies

- Review the accounting policies adopted by the Company and compare it to the latest group
accounting policies issued by the parent Company;
Going concern
- Review this assessment and consider its appropriateness in light of our understanding of
the Company.
- Enquiry around any significant litigation or claims made against the company.
Deferral of income to meet post placement obligations

- Review the calculation for the claims handling provision and assessing whether
assumptions and inputs are valid;
1.11 Group wide controls
We have identified the following group wide controls which are relevant to your audit:
 Regular meetings between group and component management to discuss business

developments and to review performance.
 Monitoring of components’ operations and their financial results, including regular reporting
routines, which enables group management to monitor components’ performance against
budgets, and to take appropriate action.

 Monitoring the timeliness and assessing the accuracy and completeness of financial
information received from components.
1.12 Subsequent events
The group timetable envisages that you will report to us on your audit on 19 April 2019.
The audit report on the group financial statements is expected to be signed in mid May 2019.
In respect of the period between the date of completing your audit and the date of signing the
financial statements, please carry out the following work (as applicable):
 Make enquiries with management;
 Review post year management accounts;
 Review minutes; and
 Provide us with the Subsequent Events report (Section 5) dated 26 April 2019 (or the date
of signing the group financial statements).
1.13 Our expected involvement in your audit
We intend to use the work performed by you for the purpose of the audit of the group financial
statements, and therefore plan to be involved in your work.
Our involvement in your audit may include the following:
 Meeting with you at the final stage to discuss your findings if these are considered
significant at group level;
 Visiting the component company to meet with that company’s management and discuss the
audit findings;
 Reviewing your audit working papers at your offices, if considered necessary;
 Reviewing copies of your audit working papers at our offices, if considered necessary; and
 Reviewing the information provided to us.
1.14 Report to management
You should prepare a report to local management on matters of significance arising from your
audit covering:
 Matters concerning financial reporting.
 Matters concerning internal control.
 Other matters (including any related to fraud) arising from your audit.

Please send a copy to us in accordance with the timetable.
1.15 Communications during the course of the audit
If you identify a matter which may potentially lead to a modified/qualified audit opinion, please
communicate this to us as soon as the matter is identified. Do not wait until the conclusion of
the audit.
If you are aware of any such matters now, please report them in the attached Component
Auditor Planning Stage Questionnaire and Confirmation Report (Section 2).
All detected or suspected instances of fraud, regardless of materiality, should be communicated

to us as soon as they are identified.
If there are problems giving rise to an expectation that you will not be able to adhere to the
timetable set out above, please inform us as soon as this becomes apparent.
1.16 Communications at the conclusion of the audit
We will require a Component Auditor Completion Questionnaire (Section 4) at the conclusion of

your audit in accordance with the timetable.
In addition to matters referred to above, the Questionnaire will, inter alia, require the following
information:
 Whether you have complied with the ethical requirements as set out above.
 Whether you have complied with these instructions.
 You will be required to identify the financial information you are reporting on.
 Information on instances of non-compliance with laws and regulations which could give rise
to a material misstatement in the group financial statements.
 Any other matters relevant to the group audit to be drawn to our attention including any
exceptions noted in written representations obtained from management.
 Your overall findings and conclusions.
1.17 Related parties
A summarised list of all UIB Holdings (UK) Limited related parties are set out below and
component auditors should use this information when confirming their independence and for
audit purposes. Please notify us of any additional related parties, together with a description of
the nature of the relationship, within the Planning Stage Responses (Section 2.2).
We have identified the following related parties at the group level:
 All companies under UIB Holdings (UK) Limited structure;
 UIB (Saudi) For Insurance and Reinsurance Broker Co. Limited – Company which the
Group treats as an associate;

 UIB Beneficios Consultoria e Corretora de Seguros Ltda – Company which the Group treats
as an associate;
 IDL Denmark Aps and Luebeke & Co. GmbH – companies in which the group hold an
investment; and
 All key management personnel and their close family members.
We consider the following to be key management personnel by UIBH:
 B S Kabban (Director);
 G J Kabban (Director);
 M G Kabban (Group President);
 P Tuite-Dalton (Director);
 K Gribben (Group Finance Director);
 A J Dilly (Director);
 R Sharp (Non Executive Director).
1.18 Access to your working papers
Regulators in the United Kingdom have imposed certain requirements regarding access to audit
working papers. These requirements result from the European Statutory Audit Directive on the
statutory audit of annual and consolidated accounts (the “Directive”), as implemented in the UK
by the Companies Act 2006 and the Audit Regulations of our registering body, the Institute of
Chartered Accountants in England and Wales (“ICAEW”). These requirements are also being
implemented in the laws and regulations of other European Union countries.
The statutory audit work of UK companies is subject to review by the ICAEW’s Quality
Assurance Department (“QAD”) or the Audit Quality Review Team (“AQRT”) of the Financial
Reporting Council (“FRC”). The latter body is responsible for the oversight of the audit
profession in the UK.
If a UK group audit is subject to review, review staff may request that the audit working papers
relating to a component of the group audited by a firm based outside the EEA be made
available to them. The Audit Regulations make the group auditor responsible for complying
with such a request. If legal or other impediments prevent the review staff having access to the
audit working papers, we must be able to provide evidence to demonstrate that reasonable
steps have been undertaken to gain access and evidence supporting the impediment.
We recognise that client confidentiality obligations, as well as other legal and regulatory
provisions, may be an impediment to access to the audit working papers. In order to facilitate
the granting of permission for local auditors to release audit working papers, our audit
engagement letter with the UK parent company requests that it uses reasonable endeavours to
obtain the consent of its overseas components for access to the audit working papers should
we so request.

It is anticipated that requests for access to overseas audit working papers will be made
infrequently. While the review staff have the right to require the complete audit working papers
to be made available, they have indicated that they will, if appropriate, limit requests to the
specific areas of the audit in which they are interested, wherever possible, and endeavour to
give reasonable notice of the request. The Institute and the AQRT have a legal obligation to
treat any audit working papers and their contents as private and confidential. They would not
disclose the working papers or any information contained therein to any other party, except as
specified in UK legislation.
To satisfy the Institute or the AQRT that we have taken appropriate action to obtain access to
overseas working papers for the review staff, we will be required to identify whether a refusal to
allow access is based on client confidentiality obligations, legal or regulatory provisions or
another matter. At the point we are made aware that audit working papers will be required by
an inspecting team, we will contact you. If there are any impediments to access to the papers,
you must identify these and provide us with evidence of the impediments as soon as you are
aware of them.
1.19 Confirmation
The attached Component Auditor Planning Stage Questionnaire and Confirmation Report
include a confirmation by you in respect of these instructions. If you have any questions in
relation to them, please contact us straight away.

2 Component auditor planning stage questionnaire and confirmation
report
To: PKF Littlejohn LLP
Audit of: UIB Holdings (UK) Limited
Year ended: 31 December 2018
Name of component audit firm: [Name of your audit firm]
Components to be audited: [Name of the Subsidiary that you are auditing]
This questionnaire is provided in connection with your audit of the group financial statements of UIB
Holdings (UK) Limited for the Year ended 31 December 2018 to assist us in expressing our opinion on
whether the group financial statements have been correctly compiled and presented in accordance with
applicable accounting standards and applicable law.
In forming our opinion on the group financial statements we rely on the work of other auditors who have
audited the underlying financial statements from which the consolidated financial statements are
prepared.
The purpose of this questionnaire is to enable us to obtain an understanding of the work carried out by
the auditors of components of the group and for those auditors to confirm various matters to us.
2.1 Information about your firm and your skills and experience
International network membership
1. Are you a full member firm of PKF International Limited? Y/N
2. If so will you use the PKF International Audit Manual to perform the audit(s)?
Y / N / N/A
3. We understand that further enquiries may be made as to our firm’s standing

in PKF International. Y/N
4. Are you a full member firm of another international network of accounting

practices which is a full member of the Forum of Firms? Y/N
If Y, give name of network:

Professional qualifications and competence
5. The engagement partner(s) and manager(s), with primary responsibility for

the work to be performed in the audit of the component’s financial
information, possess the necessary professional qualifications and
competence to perform this engagement. Y/N
In this respect, we confirm the following:
Role Name Qualification(s) Experience Experienc Experience

with the e in the with the
firm industry component
Engagement
Partner
Manager
Quality
Control
Reviewer
6. Please note below the following information relevant to your firm:
(a) qualifications of your firm to carry out audits in your country:
(b) the size of the firm, including number of offices, number of partners and number of staff
employed:
7. The engagement partner(s), manager(s) and all team members involved in

the audit of the component fulfil the training requirements as stated by the
profession. Y/N
Quality control
8. Does your firm comply with the requirements of ISQC 1 (or equivalent US or
Canadian Standards) including carrying out its own internal quality control
monitoring of audit work? Y/N
9. Has the engagement partner been subject to quality control review on a

cyclical basis and, where relevant, has any remedial action been taken? Y/N
Please provide details of the latest scores and findings from the most recent
quality control reviews:

10. Is the quality of your audit work also monitored by an organisation
independent of your firm e.g. independent regulators, professional bodies or
peer review? Y/N
Give details below:
11. Is the organisation referred to above independent of the auditing profession

in your country? Y/N
12. Does any external monitoring body named in 7 above make public reports on
firms? Y / N / N/A
(If so, please attach the last such report on your firm).
The audit engagement
13. Have you obtained an appropriate engagement letter confirming your

appointment as auditors, containing a summary of the respective
responsibilities of those charged with governance and the auditors and
explaining the scope of the audit (including the work necessary to report to us
as group auditor)? Y/N
If Y, please attach a copy.
14. Are you satisfied that the directors (or equivalent) do not intend to impose a
limitation on the scope of your work such that you would expect to be unable
to express an opinion? Y/N

15. Is this the first year in which you are auditing the component? Y/N
If Y, have you contacted the previous auditor and were there any matters of
significance in connection with the previous auditor ceasing to act? Y / N / N/A
Please provide details.
Independence, ethical matters, threats to objectivity and independence
If you confirm your objectivity and independence to your client in writing please attach a copy of
the confirmation.
16. Do you carry out any services other than auditing for the component? Y/N
If Y, please list below the services performed, the fees charged and the safeguards put
in place.
17. Does any member of the engagement team have any financial, business,
employment or personal relations with the component or its directors or
senior management? If not then please confirm your independence. Y/N
If Y, please list below the potential threats and the safeguards in place.
18. Does the engagement partner, key audit partner or any staff in senior
positions have any long association with the component?
Long association is defined as more than 5 years for a listed entity / Public
Interest Entity (PIE) and more than 10 years for an unlisted entity involvement
in the audit work for the client. Y/N

19. In relation to the component are there any:
a. outstanding fees or fees taken on a contingent basis;
b. threatened or actual litigation; or
c. members of the engagement team (or immediate family members) who

can influence the conduct or outcome of the audit and who have
accepted gifts of significant value from the client? Y/N
20. Are there any other threats to your integrity, objectivity or independence as
component auditor? Y/N
21. We confirm that our firm is compliant with the independence and ethical
requirements of:
 the Financial Reporting Council (FRC) Ethical Standard and any other
requirements imposed by our professional body; or
 the Code of Ethics for Professional Accountants issued by the International

Federation of Accountants (the “IFAC Code”); or
 our local standard-setter or professional body, which contain at least the same
requirements as the IFAC Code.
[Please delete as appropriate] Y/N

If N, please explain below any matters in respect of which you are not
compliant.
We should be advised immediately of any situations in which your independence has

been or may appear to be impaired.
Auditing standards
22. Does extant GAAS in your country incorporate all ISAs issued by the IASB
extant at the date of the financial statements? List below any not incorporate Y/N
23. We confirm (regardless of the above) we will conduct our audit in accordance
with International Standards on Auditing. We confirm we have an
understanding of these based on our understanding of International
Standards on Auditing (including any ISA listed above not extant in the
national GAAS framework in our country). Y/N
Reporting framework
24. We confirm we have an understanding of UK GAAP sufficient to fulfil our

responsibilities in relation to the audit of the group financial statements. Y/N
Specialist’s skills and knowledge (if appropriate)
25. We confirm we possess the special skills knowledge necessary to perform

our audit work. Y/N
Audit approach
26. Please provide details on how the engagement team obtains an

understanding of the component’s information systems and assesses the
overall IT dependency of the component:

27. Does the engagement team seek to use data analytics in the audit of the
component?
Y/N
If so, please provide details of the areas in the audit that data analytics will be
used and what assurance will be obtained from that work:

2.2 Planning stage responses
If you prepare an audit planning memorandum, please forward a copy to us. If the following
matters are not dealt with in your planning memorandum, please complete below.
2.2.1 Component risks – significant risks including risks of material misstatement due
to fraud
In respect of the significant risks identified in your instructions under section 1.9, our audit
response will be as follows:
Related account
balance/class of
Description of significant transaction/ Planned
Significant risk risk disclosure Assertion(s) response
Income There is a risk of non Income and AC, CF, EX

recognition – compliance with the Debtors/Creditors
recognition of group’s accounting policy
insurance on revenue recognition.
broking income
Management There is a risk that Trial Balance AC, EX

override of management can override
controls controls.
Completeness There is a risk that Income and AC, CP, EX

and accuracy of insurance broking Debtors/Creditors,
insurance transactions and balances Bank and Cash
broking are not completely and
transactions and accurately recorded in the
balances accounting systems.
The existence There is a risk that inter Intra-Group AC, CF, CL,
and disclosure of group and related party balances and CP, EX,
inter-group transactions are not consolidations, OC.
transactions authorised and disclosed. Disclosures
(including loans,
guarantees and
letters of
support) and
other related
party
transactions
Aged and bad There is a risk that aged Intra-Group AC, CF, CL,
debts debtor balances are not balances and CP, EX,
recoverable. consolidations, OC, EX, VL
Income and
Debtors/Creditors
Funding There is a risk that Debtors CL, EX, VL

balances are being funded
without designated

authorisation and
balances which are funded
are not recoverable.
Unmatched cash There are two risks with Income and AC, CP, OC
the unmatched cash: Debtors/Creditors
1) Unmatched cash will
integrity of the
insurance debtor and
creditor balances.
2) If you are operating
under the client
money rules in your
jurisdiction,
unmatched cash will
drawdown of realised
commission/brokerage
in respect of any client
money calculation
performed.
Compliance with There is a risk of non

all group compliance with group
accounting accounting policies. We
policies refer you to section 8 for
group accounting policies.
Going concern There is a risk that the

entity may not be a going
concern.
Deferral of There is a risk that where Income and AC, EX, CL

income to meet the company has post Creditors
post placement placement obligations in
obligations respect of handling claims,
an element of income is
not deferred to meet the
costs of these post
placement obligations.
The following significant risks identified above by the group engagement team are not
considered relevant to our audit of [Subsidiary]. The reasons why we believe they are not
applicable are also explained below.
[Specify]

We have identified the following significant risks in relation to the audit in addition to those
notified in your instructions:
Related account
balance/class of
Description of transaction/ Planned
Significant risk significant risk disclosure Assertion(s) response
[Risk]
[Risk]
2.2.2 Related parties
We have identified the following as related parties for the purpose of our audit in addition to any
referred to in your instructions:
[Specify]
2.2.3 Materiality level
The materiality level we will apply to our audit is …………………………………..
The performance materiality level we will apply to our audit is …………………………..
2.2.4 Assessment of the component’s susceptibility to fraud
Please outline your assessment in this area and communicate to us the results of your discussions
within the engagement team and with management about the susceptibility of the component’s
financial statements to material misstatement from fraud:
[Specify]
2.2.5 Going concern
Please outline any issues regarding the ability of [Subsidiary] to continue as a going concern.
[Specify]
2.3 Confirmations
We have read the audit instructions in this document.
We acknowledge that:
The financial statements of [Subsidiary] will be included in the group financial statements of UIB
Holdings (UK) Limited.
You may consider it necessary to be involved in the work you have requested us to perform on the
financial information of [Subsidiary] for the year ended 31 December 2018.
You intend to evaluate and, if considered appropriate, use our work for the audit of the group
financial statements of UIB Holdings (UK) Limited.

We confirm that:
Either:
We will be able to comply with the instructions.
Or
We advise you that we will not be able to comply with the following instructions [specify
instructions] for the following reasons [specify reasons].
The instructions are clear and we understand them.
Or
We would appreciate it if you could clarify the following instructions [specify instructions].
We will cooperate with you and provide you with access to relevant audit documentation.
We will inform you of any changes in the above representations during the course of our audit
work.
We will inform you of all detected or suspected instances of fraud, regardless of materiality.
Your primary contact on the component engagement team is [insert contact name].
Audit firm’s signature
Date

3 Audit summary memorandum
The Audit Summary Memorandum should be used to document the major findings and
conclusions on significant auditing, accounting and reporting issues, including areas of
significant judgment. Sufficient information should be included in the Audit Summary
Memorandum to support your conclusions about significant risks and issues, your evaluation of
misstatements, and your conclusions on the appropriateness and sufficiency of your audit or
review procedures.
Matters for inclusion in the Audit Summary Memorandum:
3.1 Summary of audit approach
Provide a summary of the audit approach (items may include but are not limited to the following)
 Reliance on operating effectiveness of controls and whether these controls have been
tested.
 Scope of procedures performed.
 Use of experts.
 Other significant items.
3.2 Summary of actual financial results
Income Statement/Profit and Loss Account
Income
Statement/Profit Current period Prior period Monetary
& Loss heading balance balance difference % Difference
Revenue
Gross Margin
Administrative
expenses
Operating Profit
Taxation
Finance income
Finance costs
Other
comprehensive
income

 Provide an explanation of material fluctuations between the current and preceding period
and, if applicable, against budget.
 Any key trends or movements.
 Impact of changes in accounting policies.
Statement of Financial Position/Balance Sheet
Statement of
Financial Current period Prior period Monetary
Position heading balance balance difference % Difference
Intangibles
Tangibles
Trade and other

receivables
Trade and other

payables
Other reserves
add or remove
headings as
applicable
 Provide an explanation of material fluctuations between the current and preceding period.
 Any key trends or movements.
 Impact of changes in accounting policies.
 Possible valuation issues, including impairment.

3.3 Materiality issues
State the level of materiality adopted for the audit and whether there were issues arising that
caused materiality to be revised after the planning stage.
3.4 New accounting policies and disclosures
State the audit work performed on any significant new accounting policies and disclosure
requirements identified at the planning stage and conclusions thereon.
3.5 Related parties
State the audit work performed on related parties disclosures, including identification
procedures, and conclusions thereon.
3.6 Management bias
Provide details of any indicators of possible management bias.

3.7 Summary of work performed
Where appropriate, please give details in addition to your responses to the questions below of any
other significant matters noted in during your audit work for that area.
Revenue recognition, Profit and Loss Account, cut-off
 Have you assessed the design and implementation of all material sales systems controls
(e.g. by a walkthrough test)?
Y/N
 How did you confirm the completeness of sales?
 Tests of operating effectiveness of internal controls;

 Detailed transactions test; or
 Analytical procedures (please give details).
 Please give details of key revenue recognition policies:
 How have you confirmed the completeness of other income?
 Have you assessed the design and implementation of all material purchase system controls
Y/N
 How did you confirm the occurrence of purchases?


 Have you assessed the design and implementation of all material wages system controls
Y/N
 How did you confirm the occurrence of wages?

 Please give details of how you confirmed that cut-off has been properly applied?
Intangible fixed assets
 Have you verified that intangible fixed asset expenditure has been accounted for accurately?
Y/N
 Please give details of how you verified existence, rights and obligations and valuation of
intangible fixed assets:
 Is the accounting policy for amortisation in accordance with accounting standards and group
accounting policies?
Y/N
If N, please provide details:

 How have you ensured that amortisation has been calculated accurately?
 Where necessary, how have you undertaken impairment reviews and what were the results?
Tangible fixed assets
 Have you verified that tangible fixed asset expenditure has been accounted for accurately?
Y/N
 Please give details of how you verified the existence of tangible fixed assets
 Where items were selected for physical verification, what was the total value of unconfirmed
amounts and what alternative evidence was obtained?
 Please give details of how you verified rights and obligations (i.e. title) and valuation of
tangible fixed assets:
 Please outline how you confirmed the completeness of disposals of fixed assets :

 Is the accounting policy for depreciation in accordance with accounting standards and group
accounting policies?
Y/N
 How have you ensured that depreciation has been calculated accurately?
 Where necessary, how have you undertaken impairment reviews and what were the results?
 Where a revaluation has taken place, please give details of how you verified the accuracy of
the revaluation?
 Where the entity has investment properties, give details of how you have ensured that they
have been valued annually in line with accounting standards
 Please give details of how you identified capital commitments and give details of such
commitments:

Investments
 Please give details of how you confirmed the rights and obligations (i.e. title) of fixed and
current asset investments:
 How did you substantiate the cost and valuation of listed and unlisted investments?
Receivables
 Please indicate how you confirmed the existence of year-end trade debtors:
 Debtors circularisation;
 After-date receipts;
 Analytical procedures (please give details); or
 Other (please give details).
 Where items were selected for circularisation or after-date receipts testing, what was the
total value of unconfirmed amounts and was appropriate alternative evidence obtained?

 Have you confirmed the completeness of provision for bad and doubtful debts? Y/N
 Please provide details of significant old debts that have not been provided for along with the
reasons for not providing. (If this information has been included in the schedule of
unadjusted errors then please indicate this here rather than duplicate the information).
 Please give details of how you confirmed that cut-off has been properly applied:
 Have you obtained sufficient evidence on the existence of material prepayments and sundry
debtors?
Y/N
Bank and cash
 Please indicate how you confirmed the existence and completeness of all bank balances:
 Direct confirmation from banks; or

 Reviewed bank reconciliations.
 Have you confirmed the existence of material cash balances?
Y/N
Payables

 Please indicate how you confirmed the existence of year-end trade debtors:
 Creditors circularisation;
 Supplier statement reconciliations;
 Analytical procedures (please give details); or
 Other (please give details).
 Where items were selected for circularisation or supplier statements testing, what was the
total value of unconfirmed amounts and was appropriate alternative evidence obtained?
 Please give details of how you confirmed that cut-off has been properly applied:
 Have you confirmed the completeness and rights and obligations of loan balances and have
you confirmed that all charges have been properly disclosed?
Y/N
 Is the accounting policy for hire purchase and finance leases in accordance with accounting
standards and group accounting policies and have you ensured that it has been calculated
accurately?
Y/N

 Have you obtained sufficient evidence on the completeness of material accruals, deferred
income and sundry creditors?
Y/N
Taxation
 Have you confirmed the existence, accuracy and completeness of the year end
corporation tax liability? Y/N
 Were there any significant matters noted in relation to the audit of VAT? Y/N
If Y, please provide details:
 Have you reviewed correspondence with the relevant tax authorities and were
there any significant matters noted? Y/N
 Have you confirmed that the deferred tax provision has been made in accordance
with the applicable accounting standards? Y/N

Provisions for liabilities and charges
 Please give details of how you have confirmed the completeness of provisions:
 How have you confirmed that all contingent liabilities and assets have been identified and
how did you evaluate the circumstances to determine whether disclosure was required?
 Please give details of how you have confirmed compliance with key laws and regulations
and what was the outcome:
Capital and reserves
 Have you verified any changes in share capital during the year are in accordance
with the company’s Memorandum and Articles of Association?
Y/N
 Please give details of any material matters arising following your review of the
directors’ board meeting minutes:

Related parties (including other group entities)
 Have you confirmed the occurrence, completeness and accuracy of transactions

with related parties (including directors / trustees etc) and have you confirmed the
existence and completeness of the year end balances?
Y/N
 Please provide a list of all related parties during the year together with the reason why they
are related.
 Please give details of how you have confirmed inter-company balances and
transactions:
 Have all disputes between group entities in respect of balances been satisfactorily
reconciled? Y/N

 Where there are non-coterminous year ends, have the balances been reconciled? Y/N
3.8 Letter of representation
Comment on non-standard paragraphs required in the letter of representation, and any reasons
for insufficient audit evidence, and confirm that any lack of evidence does not constitute a
limitation in scope.
3.9 Other matters
Work on journals. (provide details including testing performed, results and conclusions reached)
Work on unusual transactions. (provide details including testing performed, results and
conclusions reached)
Work on controls. (provide details including testing performed, results and conclusions reached)

Any evidence of management overriding systems and controls. (provide details including testing
performed, results and conclusions reached)
Work on key laws and regulations central to the activities of the component. (provide details
including testing performed, results and conclusions reached)
3.10 Outstanding issues
Are any significant matters outstanding that must be resolved before the signing of the audit
opinion.

4 Component auditor completion questionnaire
To: PKF Littlejohn LLP
Audit of: UIB Holdings (UK) Limited
Name of component audit firm: [Name of your audit firm]
Components to be audited: [Name of the Subsidiary that you are auditing]
This questionnaire is issued in connection with the group financial statements of UIB Holdings
(UK) Limited for the year ended 31 December 2018 to assist us in expressing our opinion on
whether the group financial statements have been correctly compiled and presented in
accordance with applicable accounting standards and applicable law.
In forming our opinion on the group financial statements we rely on the work of other auditors
who have audited the underlying financial statements from which the consolidated financial
statements are prepared.
The purpose of this questionnaire is to enable us to obtain an understanding of the work carried
out by the auditors of components of the group and for those auditors to confirm various matters
to us.
Please complete all of the questions and, where specifically asked, insert the details
requested. Where further information is necessary in order to fully understand a given
situation, please provide the additional information in the space provided or, if preferred,
attach a copy of the relevant working paper.
Where an individual area is considered to be of high risk or of specific significance to the

audit, the inclusion of further information is of particular importance.
Where a question may be answered by a cross-reference to details contained in either a

planning or audit summary memoranda, please attach a copy of the relevant, fully cross-
referenced memorandum.
4.1 Completion stage responses
Please attach the audited financial statements and your audit report for consolidation purposes.
Audit fieldwork
Have there been any changes to the information that you provided in the Component
Auditor Planning Stage Questionnaire and Confirmation Report (Section 2) that have
arisen out of your audit fieldwork? Y/N

Did the results of any procedures cause you to modify or revise the audit programme in any
way during the course of your work? Y/N
Except as stated above, were all procedures on the audit programme carried out in a
satisfactory manner? Y/N
Are there documented conclusions in all areas which support the overall conclusion
on the audited financial information? Y/N
If N, please provide reasons why:
Was there a detailed review of the audit work by a manager or a partner? Y/N
Please provide details:

Were there any related party transactions that took place in the period and any
outstanding balances at the period end other than those disclosed in the audited
financial information (including intra-group transactions)? Y/N
Response to Significant Risks including Risks of Material Misstatement due to Fraud
These risks must include all those noted during planning in Section 2 and any further risks
noted during testing.
Account balance(s), Risk

classes of transaction or addressed
Significant risk disclosure(s) affected Procedures performed (Yes/No)
Income recognition – Income and

recognition of Debtors/Creditors
insurance broking
income
Management override Trial Balance

of controls
Completeness and Income and

accuracy of insurance Debtors/Creditors, Bank
broking transactions and Cash
and balances
The existence and Intra-Group balances and

disclosure of inter- consolidations,
group transactions Disclosures
(including loans,
guarantees and letters
of support) and other
related party
transactions
Aged and bad debts Intra-Group balances and

consolidations, Income
and Debtors/Creditors
Funding Debtors
Unmatched cash Income and

Debtors/Creditors

Compliance with all
group accounting
policies
Going concern
Deferral of income to Income and Creditors

meet post placement
obligations
Have you complied with the Component Auditor Instructions in all respects? Y/N
If N, please provide detail:
Have you complied with the independence and ethical requirements of the extant
IFAC Code of Ethics? Y/N
Have you identified the audited financial information that you are reporting on? Y/N
Are you aware of any instances of non-compliance with laws and regulations which
could give rise to a material misstatement in the group financial statements? Y/N
Have you prepared a schedule of all uncorrected potential misstatements that

exceed the group triviality level? Y/N
If Y, please attach a copy of your schedule (Section 6).

Have you prepared a schedule of any other misstatements (trivial or otherwise) that
you consider could be indicative of fraud? Y/N
If Y, please attach a copy of your schedule.
Have you prepared a schedule of all misstatements exceeding the clearly trivial level
detected as a result of your audit and corrected by management in preparation of the
audited financial information submitted for consolidation? Y/N
If Y, please attach a copy of your schedule (Section 7).
Have you prepared a schedule of disclosure deficiencies? Y/N
If Y, please attach a copy of your schedule.
Have you prepared a document noting the overall findings and conclusions of your
audit procedures? Y/N
Does this document include where applicable:
a) full explanation of any items shown as exceptional in the audited financial

statements; Y/N
b) details of any changes in accounting policy or practice; Y/N
c) details of any significant matters requiring the exercise of judgement; Y/N
d) the resolution of potential problems identified at the planning stage; Y/N
e) any other matters of significance arising during the audit? Y/N
Please attach a copy of this document / confirm included in the Audit Summary Memorandum.
Have you prepared a report to local management on matters of significance arising

from your audit? Y/N
If Y, please attach a copy of your report.
If N, please send a copy of your report to us as soon as possible, or confirm that

there are no matters arising.
Are there any other matters relevant to the group audit to be drawn to our attention
including any exceptions noted in written representations obtained from
management? Y/N
If so, please provide details:

Audited Financial Statements
Was an overall analytical review of the audited financial information carried out,
documented on the file and reviewed by a partner? Y/N
Where entity is itself a parent, have consolidated financial statements been

prepared? Y/N
Do you anticipate being able to give an unqualified audit opinion on the statutory
financial statements? Y/N
Have you considered the effect on the audited financial information of events after
the reporting date, up to the date of submission of the audited financial information?
Are there any significant events, the effect of which is:
a) included in the audited financial information; Y/N
b) not included in the audited financial information? Y/N
If so, please provide details of (a) and/or (b):
Please note that you will also be asked to conduct a review of events after the reporting date,
up to the date immediately prior to our audit clearance on the Group financial statements, and to
report to us any significant matters (Supplementary Subsequent Events Report).

Other matters
Were any going concern issues considered at the completion stage? Y/N
If Y, please provide details along with your conclusions thereon and any supporting evidence
obtained:
Has your work been designed to detect contingent liabilities and are you satisfied
that adequate disclosure of contingencies is made in the audited financial
information? Y/N
Have you obtained a letter of representation from the company’s directors or those
charged with governance detailing all significant matters where management
representations have been relied upon? Y/N
If Y, please attach a copy of this document.
If N, explain why not:
Can you confirm that no limitations have been placed on the scope of your work?
Y/N

Did you receive all the explanations and explanations you felt necessary for the
purpose of your examination of the audited financial information? Y/N

4.2 Confirmations
We confirm that:
We have completed the attached group audit questionnaire in accordance with your
instructions.
Group instructions have been complied with and all information necessary for the audit of the
group accounts has been provided.
We have attached the following documents:
 A copy of the component financial information, marked for identification purposes, for the
year ended 31 December 2018;
 A copy of the component’s audit report for the year ended 31 December 2018 signed by
us;
 A summary of unadjusted misstatements;
 A summary of significant deficiencies in internal control;
 A representation letter obtained from component entity management;
 A summary of our overall findings, conclusions or opinion.
[Please delete as appropriate]
The applicable financial reporting framework under which the financial information has been
prepared is. UK GAAP [except as follows: [provide details]].
The audit has been conducted in accordance with International Standards on Auditing (UK).
[Please amend as necessary.]
We have complied with the FRC Ethical Standard / the IFAC Code of Ethics for Professional
Accountants. [Please amend as necessary.]
Our firm complies with the International Standard on Quality Control 1 (ISQC 1).
Date

5 Subsequent events report
Audit of the financial statements of UIB Holdings (UK) Limited and component(s)
Component: [Name]
In accordance with your instructions we have carried out a subsequent events review in
accordance with International Standard on Auditing 560 (UK) ‘Subsequent events’ in respect of
the above group component(s) covering the period up to ……………………………………(date).
Either:
* We confirm that we are not aware of any events that may require adjustment of the Financial
Information for the Year ended 31 December 2018 on which we have previously provided an
auditor’s report. In addition we are not aware of any events that may require disclosure in any
financial statements of the component drawn up on the basis of this information or in the
consolidated financial statements of the group.
Or:
* The following matters have come to our attention that may have an impact on the group
financial statements:
_________________________________
Date
* Delete as appropriate

7 Summary of component corrected misstatements
Summary of Component Uncorrected Misstatements

Cause of Account Workpaper
Description of Misstatement Nature of Misstatement Misstatement Balance Reference Assets Liabilities Equity Income Statement TOTAL
Debit (Credit) Debit (Credit) Debit (Credit) Debit (Credit)
Current Year Misstatements
0
0
0
0
0
0
0
0
0
0
0
0

8 Group accounting policies
As detailed in the main group instructions, these have been forwarded to all component auditors.
If you have any queries please contact Keith Gribben, Damon Jackson or Paul Sinfield on
keith.gribben@uib.co.uk, damon.jackson@uib.co.uk or paul.sinfield@uib.co.uk and Carmine Papa /
Bethanie Crayston on cpapa@pkf-littlejohn.com / bcrayston@pkf-littlejohn.com
49
49

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PKF Littlejohn LLP

Component auditor instructions

1 Component auditor instructions 1

2 Component auditor planning stage questionnaire and confirmation

3 Audit summary memorandum 22

4 Component auditor completion questionnaire 37

5 Subsequent events report 46

UIB Holdings (UK) Limited

UIB Holdings (UK) Limited

Name of Component Audit Firm Components to be audited

1.2 Nature of your work

UIB Holdings (UK) Limited 1

1.5 Key contacts

Your key contacts at our firm are:

Partner: Carmine Papa

Manager: Bethanie Crayston

Auditor in charge: Andy Lukasevic

Please return the completed documents to all of the above.

1.6 Timetable and deliverables

The timetable and deliverables in relation to your audit is as follows:

Receipt of completed Component Auditor Planning Stage 1 March 2019

Receipt of Audit Summary Memorandum (Section 3). 19 April 2019

Receipt of Component Auditor Completion Questionnaire 19 April 2019

Receipt of signed Audit Report and Financial Statements. 19 April 2019

UIB Holdings (UK) Limited 2

Receipt of Audit Findings Letter and Report to Management 19 April 2019

Receipt of schedule of Uncorrected Misstatements exceeding the 19 April 2019

Receipt of Schedule of Corrected Misstatements (Section 7). 19 April 2019

1.7 Ethical requirements, including independence requirements

Please report to us:

UIB Holdings (UK) Limited 3

 All disclosure deficiencies.

1.9 Component risks – significant and identified

Income There is a risk of non Income and AC, CF, EX

Management There is a risk that Trial Balance AC, EX

Completeness There is a risk that insurance Income and AC, CP, EX

Funding There is a risk that balances Debtors CL, EX, VL

UIB Holdings (UK) Limited 4

Compliance with There is a risk of non

Going concern There is a risk that the entity

1.10 Instructions as to nature of work

UIB Holdings (UK) Limited 5

Management override of controls:

Completeness and accuracy of insurance broking transactions and balances:

The existence and disclosure of inter-group transactions (including loans, guarantees

Aged and bad debts

Compliance with all group accounting policies

Deferral of income to meet post placement obligations

1.11 Group wide controls

 Regular meetings between group and component management to discuss business

UIB Holdings (UK) Limited 6

1.12 Subsequent events

 Make enquiries with management;

 Review post year management accounts;

 Review minutes; and

1.13 Our expected involvement in your audit

Our involvement in your audit may include the following:

 Reviewing your audit working papers at your offices, if considered necessary;

 Reviewing the information provided to us.

1.14 Report to management

 Matters concerning financial reporting.

 Matters concerning internal control.