Fees Briefing Paper Chishala Kateka, IESBA Member and Fees Working Group Chair IESBA Meeting March 13-15, 2017.

Slides:



Advertisements
Similar presentations
International Ethics Standards Board for Accountants Monitoring Group Report Ken Dakdduk Paris June 2010.
Advertisements

Breach of a Requirement of the Code Marisa Orbea New York 19 June 2012.
International Federation of Accountants April 28, 2009 Impact Assessment Process for IFAC Linda Lach and Alta Prinsloo.
Page 1 Structure of the Code Don Thomson, Working Group Chair and IESBA Member IESBA CAG Meeting April 10, 2013 New York.
Page 1 | Proprietary and Copyrighted Information Long Association Task Force Marisa Orbea, Task Force Chair IESBA Meeting June 29-30/1 July, 2015 New York,
Page 1 Long Association (Rotation) Marisa Orbea IESBA March 2013 New York, USA.
Page 1 Professional Skepticism Prof. Annette Köhler, IAASB Member and Working Group Chair IAASB CAG Meeting September 15, 2015.
Page 1 | Proprietary and Copyrighted Information Safeguards Gary Hannaford, Task Force Chair IESBA Meeting New York, USA June 29 – July 1, 2015.
CODE OF ETHICS Cases & Issues of Unjustified Removal of Auditors:
Update on Fees Chishala Kateka, IESBA Member and Fees Working Group Chair External Presenter, Prof. David Hay University of Auckland, New Zealand IESBA.
International Federation of Accountants
Structure of the Code – Phase 1
IESBA CAG Meeting Madrid September 13, 2017
IESBA Code vs. local codes in G20 & Major Financials Centers
Professional Skepticism
Professional Skepticism (PS)
Safeguards- Feedback on Safeguards ED-2 and Task Force Proposals
Structure of the Code Don Thomson, Task Force Chair IESBA Meeting
Meeting Venue Date Public Interest Oversight Board Maria Helena Pettersson PIOB Board Member IESBA CAG Meeting New York – March 6, 2017.
Review of Part C Phase 2 - Applicability
Review of Part C of the Code – Applicability
Structure of the Code – Phases 1 and 2
Structure of the Code – Phase 2 TF Comments and Proposals
Professional Skepticism and Professional Judgment
Setting Actuarial Standards
IAASB-IESBA Coordination
Structure of the Code Phase 1
Proposed ISRS 4400 (Revised)
The IAASB’s Future Strategy
What information is in the auditor and management letters in The J. M
Non-assurance Services
Alignment of Part 4B with ISAE 3000
IESBA Meeting New York March 12-14, 2018
IESBA Meeting Athens, Greece June, 2018
Non-assurance Services
Safeguards Phase 2 Gary Hannaford, Task Force Chair IESBA Meeting
Inducements Mike Ashley – IESBA Member and Task Force Chair
Breach of a Requirement of the Code
Review of Part C of the Code – Inducements & Applicability
IESBA Meeting New York September 19-22, 2017
Professional Skepticism – Longer-Term Initiative
Quality Management at the Engagement Level Proposed ISA 220 (Revised)
Structure–Feedback on Structure ED-2 and Task Force Proposals
Non-assurance Services
Don Thomson, Task Force Chair IESBA Meeting New York July 7-9, 2014
Fees Chishala Kateka, IESBA Member and Fees Working Group Chair
Alignment of Part 4B with ISAE 3000
IESBA Meeting New York September 17-20, 2018
Restructured Code – Rollout
Restructured Code – Rollout
Professional Skepticism and Professional Judgment
Long Association Task Force
Alignment of Part 4B with ISAE 3000
Fees Initiative Chishala Kateka, Working Group Chair IESBA Meeting
Update on Fees External Presenter, Prof. David Hay University of Auckland, New Zealand IESBA CAG Meeting March 6, 2017.
Inducements Mike Ashley – IESBA Member and Task Force Chair
IAASB-IESBA Coordination
IESBA Meeting New York December 3-5, 2018
Future Strategy and Work Plan
Non-assurance Services
Non-Assurance Services
Fees – Issues and Proposals
Alignment of Part 4B with ISAE 3000
IESBA CAG Meeting New York, USA March 4, 2019
Non-Assurance Services
Alignment of Part 4B with ISAE 3000
IESBA Meeting Nashville June 17-19, 2019
Lyn Provost, IAASB Member and Task Force Chair IAASB Meeting
IAASB – IESBA Coordination Fees Proposals by IESBA
Audit Evidence Bob Dohrer, Audit Evidence Working Group Chair
Presentation transcript:

Fees Briefing Paper Chishala Kateka, IESBA Member and Fees Working Group Chair IESBA Meeting March 13-15, 2017

Overview of the Session Receive an update of the WG’s fact finding activities Provide input on the upcoming stakeholders outreach Exchange views about next steps

Background - Fees Initiative Responsive to regulatory concerns and PIOB’s call in early 2015 to revisit issues on auditor independence from a broader perspective, including fee-related issues Supported by CAG and other stakeholders IESBA brought forward its fees related initiatives that was originally scheduled to commence in 2017 WG was established in July 2015

Background – Objectives of the WG Two objectives Fact finding – Is there is a relationship between fees and threats to compliance with FPs and to independence? Develop recommendation for IESBA’s consideration

Background – Four Areas of Focus Level of audit fees Relative size of fees Ratio of non-audit services fees to audit fees Firm with significant non-audit service business

Background – Non-audit vs non-assurance “Non-audit services” is used in the terms of reference and the research scope “Non-assurance services” is the term used widely in the Code The WG agrees to use “non-assurance services” for forming conclusions about its fact finding activities except when referring to the codes, rules or regulations of others

Approach to Fact Finding Three key fact finding activities: 1. Review of academic research 2. G-20 benchmarking 3. Stakeholders outreach

Fact Finding - Review of Academic Research 2. G-20 benchmarking 3. Stakeholders outreach

Fact Finding - Review of Academic Research Based on Prof. Hay’s observations: Evidence for four areas of focus is generally lacking or mixed except for one aspect There has been consistent findings that suggest a link between higher non-audit fees charged and threats to independence in appearance. Overall, research findings did not suggest widespread ethical problems

Fact Finding - Review of Academic Research WG’s view: Findings in the summary of academic research are generally inconclusive More information is required to better understand the nature and extent of any fee-related issues

Fact Finding - G-20 Benchmarking 1. Review of academic research 2. G-20 benchmarking 3. Stakeholders outreach

Fact Finding - G-20 Benchmarking The WG conducted an overview of the fees provisions in G-20 jurisdictions The WG has highlighted three jurisdictional measures in the briefing paper: Pre-approval of services by TCWG Required auditor communication about fees Fee cap for provision of non-audit services to audit clients

Matters for IESBA Consideration IESBA members are asked to share their views about: The WG’s fact finding completed to-date and its observations. The list of stakeholders in Appendix 2 and the questions to be asked of each stakeholder group.

Fact Finding – Stakeholders Outreach 1. Review of academic research 2. G-20 benchmarking 3. Stakeholders outreach

Fact Finding – Stakeholders Outreach The WG intends to send questionnaires to firms, regulators and audit oversight bodies, corporate governance community and investors The WG is seeking the Board’s input on two aspects: The list of stakeholders under each category of stakeholders The questions for each category

Fact Finding – Stakeholders Outreach Stakeholder group: Firms Those charged with governance Audit oversight bodies and regulator National Standard Setters Investors

Next Steps WG will distribute questionnaires to stakeholders after incorporating the Board’s comments and changes WG will review responses and conduct additional follow up discussions, outreach activities and research if appropriate

Matters for IESBA Consideration IESBA members are asked for views about possible next steps, or other actions, if any, that the WG should take to obtain an understanding of whether there is a relationship between fees charged and threats to compliance with the fundamental principles or to independence.