What are the non assurance services provided by the auditors the the clients?

The Accounting Professional and Ethical Standards (APES) Board has issued an Exposure Draft and the International Ethics Standards Board for Accountants (IESBA) has issued a Final Pronouncement in relation to the revised non-assurance services provisions.  Together with the recently issued fee-related revisions, the non-assurance services revisions strengthen the independence standards by addressing public interest concerns about independence when firms provide non-assurance services to their audit clients.

Amongst the key changes proposed to the non-assurance services provisions are:

• Strengthened provisions regarding auditor communication.  There is now a requirement for Those Charged With Governance (TCWG) at a public interest entity (PIE) audit client to concur with BDO’s assessment of the threats associated with the non-assurance services prior to the non-assurance services commencing
• A new general prohibition in providing non-assurance services to a PIE audit client, if a self-review threat to auditor independence will be created
• Further tightening of the circumstances in which materiality may be considered in determining the permissibility of a non-assurance service. Materiality is no longer a consideration for PIE audit clients in assessing the self-review threat.

While provisions come into effect for audits and reviews of financial statements for periods beginning on or after 15 December 2022, a transitional provision is in place for non-assurance services engagements entered into with a PIE audit client prior to 15 December 2022. The effect of the transitional provision is that commencement of non-assurance services to a PIE audit client prior to 15 December 2022 is subject to the provisions that were in place at the time of engagement until its completion.

Amendments to the Fee-related provisions of APES 110 Code of Ethics for Professional Accountants (including Independence Standards) 

The APES Board has issued a Final Pronouncement in relation to the amendments to the fee-related provisions within the APES 110 Code of Ethics for Professional Accountants (Code).

These include:

• Communication to TCWG at a PIE audit client, the fees and assessment thereof for non-assurance services. The purpose of this communication is to provide the background and context for the client to concur that the fees and levels of fees does not impair BDO’s independence
• Enhanced guidance on identifying, evaluating and addressing threats to independence in relation to other fee-related matters, including the proportion of fees for services other than audit to the audit fee
• Communication of information related to the audit fee to the client and to the public to assist them in forming a view that auditor independence is not compromised
• A prohibition on firms allowing the audit fee to be influenced by the provision of services other than audit to the audit client
• In the case of PIE audit clients, a requirement to cease to act as auditor if fee dependency on the audit client continues beyond a specified period.

These provisions will be effective for audits and reviews of financial statements for periods beginning on or after 1 January 2023.

Practical considerations for implementation of the revised provisions  

To facilitate compliance with such requirements, your BDO Audit Engagement Partner will discuss and agree a process with TCWG, including:

• Identifying all entities within a corporate structure to which the revised provisions would apply
• Establishing how TCWG at the PIE audit client have determined that authority for approving services is to be allocated
• Understanding the information that will be communicated to TCWG to assist them in concurring with the assessment of the services and fees.

More information

For more information on the revised provisions or to understand how this may affect our provision of non-assurance services to your organisation please contact your Audit Engagement Partner.

about the author

Director, National Risk and Ethics

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2 November 2021

Non-audit services and auditor’s independence Why do auditors provide other assurance services to their audit clients?

Stakeholders’ increased expectations from companies for more transparency are accompanied by assurance needs on the information provided. Businesses count on auditors to deliver other assurance services and contribute to markets’ sound functioning.

These assurance services are often closely linked to financial statements audit and third parties take comfort from auditor’s involvement. This publication provides an overview of the measures that ensure auditors’ independence while providing other assurance services to the companies they audit.

We detail how auditor’s independence is maintained through:

• legal restrictions and ethical requirements
• public oversight and audit committee scrutiny
• transparency of fee-related information

What are the non

What are non

What are the non

Can you provide non