The Pensions Investment Research Council raised concerns about non-audit fees
paid to PricewaterhouseCoopers
connected with its audit of Sage, and fees paid to
in connection with its audit of Paragon.
The moves came as a new report also indicated that UK firms may run greater
conflicts of interest than their European counterparts.
PIRC has recommended
that shareholders abstain from the vote on the re-appointment of Sage auditors,
PwC, which earned £1.3m in non-audit fees from the technology giant, and £1.5m
for the audit.
Paragon’s auditors Deloitte carried out £140,000 in non-audit work,
equivalent to 34% of the statutory audit fee of £410,000.
‘These factors raise concerns about the independence of the auditors. PIRC
would welcome more specific information about the audit committee’s activities
during the year under review, in particular as to how the committee ensured the
objectivity of the auditors’ opinion given the level of non-audit fees,’ PIRC
said of Paragon.
A new report by Company Reporting separately raised concerns about the issue
The company highlighted 33 instances where European companies had paid more
in non-audit fees than they had to have their books signed off 70% of these
companies were UK listed.
Examples of high non-audit fee levels included that of Alliance &
Leicester, which had paid £2.3m, or 66% of its total audit fees, to Deloitte for
tax services in relation to a business disposal.
‘The findings indicate companies in our sample, and those based in the UK in
particular, contribute significant revenues to audit firms for non-audit
services compared to the amount charged for audit purposes,’ the report said.
Smaller businesses could be excluded from government plans for making business transactions digital, found new research from ICAEW
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Further powers are being sought by HMRC, but it is ‘failing’ to use those it already has, such as Conduct Notices, says RPC
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live