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02 Feb 2010
Audit committees should be forced to explain why they choose their auditor to take on non-audit work, PwC has said.
In its submission to the Auditing Practices Board’s review on non-audit services, the audit giant said there should be more disclosure around audit committees, their decisions and the principles behind those decisions .
The board's review of the rules around non-audit services could add restrictions preventing accountancy firms from taking on work from their audit clients.
instead, PwC believes there should be new disclosures which articulate the principles that audit committees apply in deciding whether the auditor should provide non-audit services.
The firm acknowledged some concern from a "minority of commentators" that undertaking some non-audit services undermines independence.
"We believes this is largely due to the lack of detailed information about the nature and volume of those services," the firm said in its submission.
Further reading: Rentokil defends right to make non-audit decisions
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Visitor comments Add your comment
Provision of non-auidt services
I believe that the fees obtained through the provision of non-audit services could be taken as an indicator to assess the independence of the auditor. If the auditor relies too much on the fees for non-audit services, the quality of the audit may suffer owing to lack of independence.
I also agree that full disclosure of the non-audit services provided is essential, in the sense that there is no self-review audit
Posted by: Selvida Naiken, 04 Feb 2010 | 00:00
provision of non-audit service
Apart from considering the amount of recurring fee obtained from providing non-audit service, the committe should also consider the nature of the services that are being provided with a view to determining their effect on current or future audit. Where such services can have direct/visible impact on audit outcome, the firms shld be disallowed to provide such services
Posted by: Bakary Sanyang, 08 Feb 2010 | 00:00