RSA introduces 25% non-audit fee cap

by Kevin Reed

More from this author

25 Mar 2014

  • Comments
rsa-3

THE AUDITORS of embattled insurer RSA will have a cap put on the amount of non-audit fees they can earn, limited to 25% of the total audit fee.

KPMG, which was brought in to replace Deloitte as RSA auditors, picked up £7.2m remuneration in 2013, of which £2.2m was for non-audit services, according to RSA's annual report. Some £1.3m of those non-audit services related to the identification of financial and claims irregularities in RSA's Ireland division.

The previous year had been Deloitte paid £15.7m, of which £9.5m related to business transformation consultancy services, and projects related to regulatory development.

The group audit committee's report states that the non-audit services policy will "assist with maintaining the independence of the external auditor and its personnel".

"The policy was reviewed early in 2013 and revised to permit only specifically defined services considered to be audit related to be performed by the auditor, and that all non-audit services must be approved by the committee," the committee stated in the annual report. "In exceptional circumstances the auditor could be considered for additional services where there is an overwhelming business rationale, but only with board approval."

Last year, RSA's internal audit division discovered irregularities within its claim and finance functions, equating to a £70m black hole. Further reviews, including work undertaken by PwC, found issues with the bodily claims department of its Irish division, seeing RSA announcing a £128m reserve strengthening.

RSA has also launched its £773m rights issue, in a bid to restore its capital position and protect it against further headwinds.

Stephen Hester, CEO, RSA said: "Following a comprehensive review of the options available to RSA, the board believes that the rights issue will enable the group to restore its capital position and keep ahead of anticipated industry capital trends, and that this will allow the business to carry out its action and improvement plans without undue risk of suboptimal decisions forced by capital shortage or instability."

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

conservatoire-for-dance-and-drama

Finance-Director-part-time

Conservatoire for Dance and Drama, London, Permanent, Part Time, £60,000 pro rata

 

 

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.