On or about 22 October 2020, the Institute of Singapore Chartered Accountants (“ISCA”) has published a “Auditor Independence When Providing Non-Assurance Services: Findings from Survey of Audit Committee Members” after received feedback from an online survey conducted among Singapore company directors. The survey sought views on the following:
- Auditor independence when providing non-assurance services (NAS) to audit clients
- ISCA recommendations to address NAS independence concerns.
ISCA Non-Assurance Services Working Group (NAS WG) surveyed Audit Committee Members in March 2020 and obtained their views on matters concerning auditor independence when providing NAS to audit clients; and on certain ISCA NAS WG’s recommendations to address NAS independence concerns:
- Confirmation by each network firm on whether the NAS fees earned by the network firm from the parent, penultimate parent, ultimate parent and sister entities of the audit client is less or more than 1% of the network firm’s revenue;
- Definition of “audit-related services”;
- Setting a higher threshold to trigger TCWG’s elevated approval on the provision of NAS;
- TCWG’s pre-approval on the provision of NAS;
- Enhanced communication to TCWG and to public disclosure of audit fees; and
- Additional safeguards to address threats to auditors’ independence arising from NAS.
The key findings of the survey which addressed NAS independence concerns are as follows:
- Information on NAS provided by network firms to upstream and sister entities is important
- Threshold to trigger TCWG’s review to cover only controlled entities
- No elevated approval from TCWG on provision of NAS
- Definition of “Audit-Related Services”
- TCWG’s pre-approval on provision of NAS.
Presently, under the ISCA’s EP 100 Code of Professional Conduct and Ethics, there is a diversity in the interpretation and application of NAS and fee-related issues.
Source: ISCA, 22 October 2020, accessed 26 October 2020.