SEC guidance puts non-audit work at risk
The US Securities and Exchange Commission is shortly to release guidance that could make it tougher for audit firms to obtain contracts for lucrative non-audit work with their clients.
The regulator will publish a list of questions and answers for companies to help them clarify what kind of relationship they are allowed to undertake with their auditor.
Although the guidance does not change the rules that were passed last year as part of Sarbanes-Oxley it is likely to harden corporate attitudes against what they can and can’t do in offering other work to their auditors.
Audit committees will be advised to guard closely against any appearance of a conflict of interest and to take extra care when dealing with requirements governing internal controls, according to the FT.