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Appendix 3, Overview of Key Performance Indicators

On 25 September 2014, the workgroup ‘Toekomst accountantsberoep’ published the report ‘In het publiek belang’. Part of this report is a set of KPIs on which EY will have to report in our Transparency Report. On 4 March 2016 the NBA published a guidance document on a standard set of key performance indicators which are encouraged to be published in the Transparency Report.
In the overview below it is indicated if:
  • the KPI matches another internal EY KPI reported in this transparency report: a reference to that KPI is made
  • the KPI has been implemented as part of the implementation of the ‘NBA-kwaliteitsindicatoren’ and/or the standard set of NBA KPIs and the results are available
  • the KPI does not match internal EY KPIs and implementation requires more external or internal information
The KPIs include the following topics:

Teaming General
1 Number / ratio partners / Executive Directors, (senior) managers and other team members
2 Average number of years of experience split between partners / Executive Directors, (senior) managers and other team members
3 Employee turnover of partner / Executive Directors, (senior) managers and other team members (based on FTE) split between key talents / high potentials and others
4 Number of hours and percentage ratio of partner / Executive Directors, (senior) managers and other team members spent on audit engagements (split between OOBs and not OOBs), other engagements and internal projects
5 Number of overtime hours and ratio compared to total available contract hours

Training and coaching
6 Average number of training hours per employee (internal and external trainings)
7 Average investment (EUR cash out) in training and education per employee
8 Number of internal hours spent on preparation and giving training courses
9 Average hour's ratio between partner / Executive Directors, (senior) managers and other team members (leverage) split between OOBs and non OOBs audit engagements
10 Number and ratio of engagements for which the benchmark is not met
11 People survey results relating to coaching and audit quality topics

Quality measures
12 Number and ratio of audit hours spent per stage of the audit before and after financial year-end
13 Number of FTEs split between partners / Executive Directors, (senior) managers and other team members working for PPG, Independence desk and others (Risk Assurance, CO and QARA)
14 Number of consultations relating to audit and accounting topics
15 Number of annual report reviews conducted by experts outside the audit team before issuance of the audit opinion (including annual report reviews as part of the OKB process)
16 Number of OKBs performed – total and compared to the number of legally mandatory audits performed
17 Number of hours spent on OKBs (total and average per OKB performed) split between partner / Executive Directors, (senior) managers and other team members
18 Average number of hours performed on OKBs compared to total number of hours spent as part of audit engagements on which an OKB is performed
19 Number of hours and ratio spent by IT specialists as part of audit engagements (split between OOBs and non OOBs)
20 Number and ratio of engagements for which the defined benchmark is not met
21 Number of hours and ratio spent by other specialists as part of audit engagements (split between OOBs and non OOBs)
22 Number of hours spent on activities to improve the accounting profession (NBA, university, publishing etc.)

Results
23 Number of issued audit opinions as part of legally mandatory audits (split between OOBs and Other)
24 Number of internal reported or identified independence violations – total and as a percentage of total headcount
25 Number of internal warnings for independence violations – total and as a percentage of total headcount
26 Number of audit files that have been subject to a quality review (other than OKB) including summary of review results (classification of findings). Also the measures taken based on the outcome of reviews (improvement plans, penalties) need to be disclosed as part of the transparency report
27 Number of audit files that have been subject to a quality review performed by an external oversight institutions (classification of findings).
28 Conclusions accounting firm based on additional review / remediation procedures performed based on the reported findings from external oversight institutions
29 Number of penalties (including amounts) received from external oversight institutions
30 Number of partners that have been taken out of the auditor register – total and percentage compared to total number of partners
31 Number of annual report adjustments made relating to fundamental errors (Dutch GAAP) and / or material errors (IFRS) relating to companies for which EY was also the auditor in the prior financial year – total and as a percentage compared to the total number of audit opinions issued
32 Number of adjustments made relating to material errors at audit clients based on the outcome of reviews performed by external oversight institutions – total and as a percentage of total issued audit opinions
33 Number of early terminated audit engagements including reason of early termination
34 Number of claims received including status and expected outcome assessment
35 Number of incidents reported to external oversight institutions
36 Number of proceedings with the Accountancy chamber including outcome
37 Number of complaints including outcome of complaint resolution process

Status of implementation of NBA KPIs per 1 September 2016

Teaming general

1. Number and ratio partners / Executive Directors, (senior) managers and other team members (based on average FTE)

Quality rating external auditors (partners and executive directors) FY 2015-2016 FY 2014-2015
Partners/executive directors 162 8.7% 147 9.0%
(Senior) managers 402 21.6% 366 22,5%
Other 1,295 69.6% 1,115 68.5%
Total 1,860 100% 1,627 100%

2. Average number of years of experience split between partners / Executive Directors, (senior) managers and other team members

Currently only the years of experience at EY are registered and included in the overview below.
  FY 2015-2016 FR 2014-2015
Partners/executive directors 18.8 19.9
(Senior) managers 10.7 12.0
Other 4.0 5.0
Average number of years for total 6.6 8.0

3. Employee turnover of partner / Executive Directors, (senior) managers and other team members (based of FTE) split between key talents / high potentials and others

Turnover FY 2015-2016 Turnover % Headcount # High potentials key talent % Headcount
Partners/executive directors 12 0.7% 2 0.1%
(Senior) managers 51 3.1% 46 2.8%
Other 177 10.6% 23 1.4%
Total 240 14.4% 71 4.3%

Turnover FY 2014-2015 Turnover % Headcount # High potentials key talent % Headcount
Partners/executive directors 8 0.5% 0 0.1%
(Senior) managers 45 2.9% 25 1.6%
Other 180 11.8% 40 2.6%
Total 233 15.2% 65 4,2%

4. Number of hours and percentage ratio of partner / Executive Directors, (senior) managers and other team members spent on audit engagements (split between OOBs and not OOBs), other engagements and internal projects (excluding specialist hours)

FY 2015-2016 Partners/ directors (senior) managers Other Total
Financial audit (OOB) 25,227 70,668 167,604 263,499
Percentage of total 6.9% 7.8% 5.3% 6.0%
Financial audit (Non-OOB) 90,624 292,385 1,337,861 1,720,870
Percentage of total 24.9% 32.4% 42.4% 38.9%
Other engagements 90,094 290,010 1,211,879 1,591,983
Percentage of total 24.8% 32.2%td> 38.4% 36.0%
Indirect hours 157,822 248,208 437,984 844,014
Percentage of total 43.4% 27.5% 13.9% 19%
 
Total 363,767 901,270 3,155,328 4,420,366

FY15 Partners/ directors (senior) managers Other Total
Financial audit (OOB) 26,555 70,912 163,606 261,073
Percentage of total 9.6% 10.4% 5.9% 7.0%
Financial audit (Non-OOB) 88,472 303,035 1,316,832 1,708,340
Percentage of total 31.9% 44.4% 47.4% 45.7%
Other engagements 23,650 104,434 320,990 449,074
Percentage of total 8.5% 15.3% 11.6% 12.0%
Indirect hours 138,912 204,464 975,504 1,318,880
Percentage of total 50.0% 29.9% 35.1% 35.3%
 
Total 277,589 682,845 2,776,932 3,737,367

5. Number of overtime hours and ratio compared to total available contract hours

  % of total available contract hours
  FY 2015-2016 FY 2014-2015
Percentage of overtime 9.2% 8.0%

Training and coaching

6. Average number of training hours per employee (internal and external trainings)

FY15 Total hours Hours per employee
FY15 FY 2015-2016 FY 2014-2015 FY 2015-2016 FY 2014-2015
1. Partner 6,427 6.917 60 67
2. Exec. Director 3,598 4,649 67 98
3. Sr. Manager 13,160 12.436 68 70
4. Manager 20,725 18.315 99 102
5. Senior 55,558 53.038 114 121
6. Staff 201,362 149.869 250 235
Total 300,830 245.224 162 155

7. Average investment (EUR cash out) in training and education per employee
We do not have this information available, since an unambiguous definition is missing.

8. Number of internal hours spent on preparation and providing training courses

FY15 Hours FY 2015-2016 Hours FY 2014-2015
Teaching 10,336 6.400
Total 10,336 6.400
No data available yet regarding the number of internal hours spent on preparation.

9. Average hour's ratio between partner / Executive Directors, (senior) managers and other team members (leverage) split between OOBs and non OOBs audit engagements

  Partners/ directors (senior) managers Other Total
  FY 2015-2016 FY 2014-2015 FY 2015-2016 FY 2014-2015 FY 2015-2016 FY 2014-2015 FY 2015-2016 FY 2014-2015
Financial audit (OOB) 10.5% 10.0% 28.4% 18.8% 61.1% 76.0% 100% 100%
Financial audit (Non-OOB) 5.2% 5.2% 20.3% 27.1% 74.5% 62.9% 100% 100%

10. Number and ratio of engagements for which the benchmark is not met
A benchmark from NBA is not yet available.

11. People survey results relating to coaching and audit quality topics In 2015-2016 the People Survey has not been held. A People Pulse was held.

  Question Assurance
Netherlands
FY 2015-2016
Assurance
Netherlands
FY 2014-2015
1 The partners or other leaders I work with are committed to providing high quality services to our clien 87% 86%
2 I receive the on-the-job coaching I need to improve my performa n/a 56%
3 My counselor provides the support I need to help me succe n/a 65%
4 The actions of my manager(s) are consistent with the messages he/she delivers n/a 68%
5 My manager(s) provide(s) me with timely feedba 56% 49%
6 All service lines at EY team together effectively to serve our internal and external clients and meet our responsibilities to other stakehold n/a 51%
7 The people in my team(s) consistently deliver on their commitments to our internal and external clien n/a 70%
8 We regularly use appropriate client feedback to improve our proces n/a 49%
9 The people I work with are proactive in offering sound insights to our internal and ex ternal client n/a 72%
10 The people I work with adhere to EY’s Code of Conduct, even in situations when there is pressure to not follow i n/a 83%
11 The people on my team(s) anticipate and respond to issues and needs our internal and external clients may not have identifie n/a 70%
12 The people I work with invest the time to understand the issues and needs of our internal and external clients and other stakehold 76% 86%
14 I can report unethical practices without fear or reprisal n/a 75%
N/A: question was not included in people survey of previous year

Quality measures

12. Number and ratio of audit hours spent per stage of the audit before and after financial year-end Our current KPI system does not yet include the required information with this level of detail.
13. Number of FTEs split between partners / Executive Directors, (senior) managers and other team members working for PPG, Independence desk and other

  FTE PPG
Rank FY 2015-2016 FY 2014-2015
Partner/ Executive Director 15.7 9.8
(Senior) managers 28.3 24.3
Other 10.1 11.2
Total 54.4 45.3

  FTE other (Risk Assurance, CO and QARA)
Rank FY 2015-2016 FY 2014-2015
Partner/ Executive Director 6.1 3
(Senior) managers 8.4 1.9
Other 2.4 0.2
Total 16.8 5.1

  FTE Independence
Rank FY 2015-2016 FY 2014-2015
Partner/ Executive Director 1.5 1.1
(Senior) managers 4.0 2.5
Other 7.2 6.6
Total 12.7 10.2

14. Number of consultations relating to audit and accounting topics

Type of consultation Number FY 2015-2016 Number FY 2014-2015
Accounting 66 55
Auditing 1.014 1.150
Independence 221 191
Other 1 1
Total 1.302 1.412

15. Number of annual report reviews conducted by experts outside the audit team before issuance of the audit opinion (including annual report reviews as part of the OKB process)

  FY 2015-2016
Number of annual report reviews conducted by experts outside the audit team before issuance of the audit opinion 160

16. Number of OKBs performed – total and compared to the number of legally mandatory audits performed
Please refer to the total number of EQRs at page 21.

  FY 2015-2016 % of total WeCos
Number of OKBs performed total and compared to the number of legally mandatory audits performed 423 15%

17. Number of hours spent on OKBs (total and average per OKB performed) split between partner / Executive Directors, (senior) managers and other team members

FY 2015-2016 Partners/ Executive Directors (senior) managers Other Total
Average number of hours performed on OKBs 44,522 4,651 482,618 531,791
Total number of hours spent as part of audit engagements on which an OKB is performed 105.3 11.0 1,140.9 1,257.2

18. Average number of hours performed on OKBs compared to total number of hours spent as part of audit engagements on which an OKB is performed

  FY 2015-2016
Average number of hours performed on OKBs 1,257.2
Total number of hours spent as part of audit engagements on which an OKB is performed 462,194

19. Number of hours and ratio spent by IT specialists as part of audit engagements (split between OOBs and non OOBs)

  % FY 2015-2016 Hours FY 2015-2016
Financial audit (OOB)   35,028
% of total hours financial (OOB) 2,8%  
Financial audit (non-OOB)   20,972
% of total hours financial (OOB) 1,7 %  

20. Number and ratio of engagements for which the defined benchmark is not met The benchmark has not yet been defined.

21. Number of hours and ratio spent by other specialists as part of audit engagements (split between OOBs and non OOBs)

  % FY 2015-2016 Hours FY 2015-2016
Actuary   27,298
% of total hours financial (OOB) 2.2%  
Real estate services   5,213
% of total hours financial (OOB) 0.4%  
Tax   20,680
% of total hours financial (OOB) 1.7%  
Transaction service/corporate finance   9.815
% of total hours financial (OOB) 0.8%  
Other   5.891
% of total hours financial (OOB) 0.5%  

22. Number of hours spent on activities to improve the accounting profession (NBA, university, publishing etc.)

Type Number of hours FY 2015-2016 Number of hours FY 2014-2015
Teaching at university 4,000 4,478
NBA Not available Not available
Publishing articles Not available Not available

23. Number of issued audit opinions as part of legally mandatory audits (split between OOBs and Other)

  Number of audit opinions FY 2015-2016 Number of audit opinions FY 2014-2015
WeCo (OOB) 229 236
Weco (non-OOB) 2,676 2,822
WeCo 2,905 3.058

24. Number of internal reported or identified independence violations – total and as a percentage of total headcount of EY NL (not only Assurance)

Type Independence Administrative requirements Total
  FY 2015-2016 FY2014-2015 FY 2015-2016 FY2014-2015 FY 2015-2016 FY2014-2015
Total Breaches/Violations 15 11 63 81 78 92
% of total number of employees 0.77% 0.49% 2.5% 3.61% 3.09% 4.10%

25. Number of internal warnings for independence violations – total and as a percentage of total headcount
Reference is made to KPI 24. EY has no difference in the definitions for violation and warnings.

26. Number of audit files that have been subject to a quality review (other than OKB) including summary of review results (classification of findings). Also the measures taken based on the outcome of reviews (improvement plans, penalties) need to be disclosed as part of the transparency report Reference is made to page 24, 2015/2016 AQR results.

  FY 2015-2016
Number of audit files that have been subject to a quality review (other than OKB) 38

27. Number of audit files that have been subject to a quality review performed by an external oversight institutions (classification of findings).
Reference is made to pages 25 - 27, External quality review

  FY2015/2016
Number of audit files that have been subject to a quality review performed by an external oversight institution 37

28. Conclusions accounting firm based on additional review / remediation procedures performed based on the reported findings from external oversight institutions Reference is made to pages 25 - 27, External quality review

29. Number of penalties (including amounts) received from external oversight institutions During the last year one (FY 2014/2015 no) penalty of € 2,230,000 was received from external oversight institutions (the AFM). Reference is made to page 25, External quality review

30. Number of partners that have been taken out of the auditor register – total and percentage compared to total number of partners

  FY2015/2016
Number of partners that have been taken out of the audit register 11
As a percentage compared to the total number of partners 11%

31. Number of annual report adjustments made relating to fundamental errors (Dutch GAAP) and / or material errors (IFRS) relating to companies for which EY was also the auditor in the prior financial year – total and as a percentage compared to the total number of audit opinions issued

Type Number FY2015/2016 Number FY2014/2015
Annual report adjustments 58 58
Percentage of total number of audit opinions 0,5 % 0,1 %

32. Number of adjustments made relating to material errors at audit clients based on the outcome of reviews performed by external oversight institutions – total and as a percentage of total issued audit opinions

During FY2015/2016 no (FY2014/2015 no) adjustments have been made relating to material errors at audit clients based on the outcome of reviews performed by external oversight institutions

33. Number of early terminated audit engagements including reason of early termination

  FY2015/2016
Number of early terminated audit engagements 7

34. Number of claims received including status and expected outcome assessment Reference is made to page 30, Claims under civil law relating to professional conduct.

35. Number of incidents reported to external oversight institutions
Reference is made to page 17.
In FY2015/2016, 9 (FY2014/2015: 14) incidents have been reported to external oversight institutions.

36. Number of proceedings with the Accountancy chamber including outcome Reference is made to page 29, Disciplinary cases.

37. Number of EY/Ethics complaints including outcome of complaint resolution process Reference is made to page 13.

  FY2015/2016
Number of internal reports 0
Number of external reports 1