Message from the Territory Senior Partner
I am delighted to present our transparency report, as required by the EU Statutory Audit Directive, for the year ended 30 June 2019. The Transparency Report is an integral part of our annual review for the same period.
We have embarked on a process of transition that is driven by the market in which we operate, and the demands of our clients. We are investing in the upskilling of our people to be adequately prepared for the workforce of the future.
The pace of change is rapid. Underlying this disruption is technology which, coupled with a regulatory backdrop that rightly demands quality and standards to be continually enhanced, has meant that we have looked at all aspects of our business to ensure that we remain at the forefront of professional services in Malta. To do this we are investing in tools to allow us to provide more value to our clients, new services that meet the needs of the market today, and in our people, and the environment in which we work.
We are privileged to be part of a network of member firms operating in 157 countries. The PwC network employs more than 276,000 people carrying out an extensive range of services. Across the world, our firms engage specialists in areas ranging from financial reporting to social policies, from cyber security to corporate ethics, from banking regulation to environmental sustainability, and much more.
Being part of this Network allows us to carry many of these skills locally, and to access best practices from across the globe. The primary reasons why we need such diverse skills is because our clients ask for them and we believe that having a wide variety of skills and expertise available results in better work and a better service for our clients and stakeholders.
Transformation
As our clients’ needs evolve and grow, we must change and mould the capabilities we have across the firm to keep pace. We are constantly expanding our skills in areas where demand is rising, often by reallocating our talent from other areas where clients’ needs have changed, and by recruiting and training our staff. It also allows us to contribute to PwC’s global purpose, which is “To build trust in society and solve important problems.”
We are on the cusp of a transition from the traditional audit to a fundamentally different approach, enabled by transformative technologies. Audit has always been about judgement aided by technology. Now technology can do things no-one thought possible in the days of the calculator or simple spreadsheet. Audit has already started to embrace this transformation, but it needs to keep up with the accelerated pace of change. This journey is vital to ensuring audit meets the needs of the future.
The use of new tools and technologies is enabling auditors to better assess and evaluate a company’s financial performance. Advancements in data analytics and AI will expand audit beyond sample-based testing to include analysis of entire populations of audit-relevant data. It will shift audit from an annual event to an ongoing process that could, in time, be able to look at almost all aspects of what a company does.
Regulation and technology are key to a robust audit system, but they cannot succeed without people. We work hard to ensure our approach to talent entrenches the things that matter for high quality audit: integrity, technical skills, specialist skills, professional scepticism, the right values and diversity of opinions. All are vital if we are to effectively challenge clients.
We are a multi-competency firm. The benefits of being a multi-competency firm also flow to clients for whom PwC are not the auditors. A balanced portfolio of audit, tax and advisory work (with appropriate restrictions on the services delivered to both types of client) enables us to bring highly relevant specialisms, experience and insights – as well as a culture of independence of mind and professional scepticism – to all of our clients. The result is that we can develop the broadest possible view of each client’s industry and provide the highest value and quality to our clients across the board, both audit and non-audit.
With the business community facing such disruption, during the year we held a very successful Emerging Technology conference, that is to become an annual event. Through the intervention of a number of overseas speakers from the PwC Network, and contributions from our own specialists, we were able to highlight many trends that have, and will continue, to impact business locally and overseas. The event enabled us to bring to life opportunities that our clients can take advantage of.
Upskilling
We have launched an upskilling programme for all our people, an initiative that I am really proud of. This is a two-year programme that will enable our people to use tools that will make the services that we offer more efficient and relevant. Upskilling is a national issue, and besides offering this service to our clients, we are engaging with the relevant authorities to identify areas where we can contribute to the national strategy.
Just like our clients, we need to ensure that our model evolves around customer centric values and remains efficient, effective and relevant. Therefore, following our investment in Cloud for our communications model through Google for work, we have gone live with Cloud in our Workday model which oversees our HR engagement with our people, and have commenced plans to invest in Cloud for Salesforce, our CRM model.
Corporate Social Responsibility
Corporate Social Responsibility is also an area that we take very seriously. We are conscious of our responsibilities in reducing our carbon footprint, and we have largely removed the use of one-way plastic throughout the office, and significantly reduced our paper consumption through the installation of screens in all meeting rooms. We have also completed a significant investment in PV panels that will generate some of the energy that we consume. We also contribute to society at a local level, helping communities, supporting good causes throughout the island.
Looking forward
It’s been a good year for the firm and across all our lines of service and I’m particularly positive about the collaboration we’ve seen across our lines of service, as we bring one firm solutions to our clients, an important factor given the transformation that business is facing. As at 30 June 2019, PwC Malta engaged 688 people with revenues of €42 million, an increase of around 17% over last year.
I am really excited about the opportunities facing the firm. I think both the flow of talent into the organisation in the areas we’re investing in, means we’re going to have the right people that our clients will need to help them solve the important problems they face in what is a fast changing and ever complex world.
In particular this year, I would like to place on record my appreciation for the significant contribution that Chris Galea made to the firm over the years. Chris retired from the partnership at the end of 2018, upon reaching the firm’s mandatory retirement age. I was fortunate to have had Chris as a partner for many years, and his support and insight have been really valuable to us all.
I would like to thank my partners for their commitment and continued support, and all of our people, who continue to deliver professional and high quality services to our clients. I would also like to thank our clients for their continued support, and look forward to working with them in today’s ever-changing world.
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