1. Non-assurance Services
Richard Fleck, Working Group Chair
IESBA CAG Meeting
New York
March 5, 2018

2. Objectives
To obtain Representatives’ input on planned approach and timing for the NAS initiative
To inform CAG about plans for stakeholder outreach/ roundtables on the topic

3. Overview of Initiative
WG established in December 2017
To respond to PIOB and regulatory concerns
Focus is on independence provisions applicable to the provision of NAS to audit or assurance clients
WG attaches great importance to stakeholder input and reaction to the WG’s initial analysis and proposed approach

4. Overview of Developments Re NAS
2013 IESBA NAS Benchmarking
2015 Limited changes to NAS Provisions
2017 Revisions to NAS provisions as a result of enhanced CF and structural changes to Code
Other developments
New NAS requirements in local laws, regulations and Codes
IESBA November 2017 Fees Questionnaire

5. Summary of WG Observations
WG identified a number of specific issues in relation to which it seeks views at an early stage
Whether to allow firms to take into account whether a potential threat is material or significant in deciding whether to provide a NAS
Whether to distinguish between PIE and non PIE clients
Extent of auditor communication with TCWG
Nature of any requirements to disclose NAS fees
Merits/achievability of alignment of NAS provisions in the Code with NAS provisions in local ethics req’ts

6. Planned Fact-finding Activities
To define the parameters and scope of a future NAS project the WG plans to
Review and analyze those issues raised by stakeholders in relation to existing NAS prohibitions
Identify and understand any differences between the NAS provisions in the Code and ethics requirements in the G-20 jurisdictions
Undertake stakeholder outreach → Global roundtable
Take into account the final recommendation of Fees WG

7. Issues Identified (1) Revised and Restructured Code
Resulted in significant enhancement of the NAS provisions
Improvements to CF and examples of NAS safeguards
But, respondents to Safeguards ED called for Code to be more closely aligned with local ethics req’ts
Identified as a public interest matter by PIOB
Code would be stronger and more credible with a clear list of prohibitions
NAS should be approved by TCWG

8. Questions about whether NAS provisions in Code should
Issues Identified (2)
Questions about whether NAS provisions in Code should
Include more prohibitions in relation to firms and networks
Be strengthened in relation to communication with TCWG
Include more disclosure requirements related to fees
Establish fee caps
Address audit fee related matters

9. WG Views and Observations
Rationale for having global principle-based provisions
PIEs versus non PIEs
Applying the Conceptual Framework
Materiality
Advocacy Threats
Reconciliation of NAS Provisions in G-20 Jurisdictions

10. Planned Approach and Timeline to Roundtables
Date
Planned Activities
March 2018
Initial IESBA and CAG Discussions
April 2018
WG meeting
June-July 2018
Roundtables
August 2018
September 2018
IESBA and CAG Discussions – Consideration of RT feedback
December 2018
Report of fact-finding and WG recommendations

11. Matters for CAG Consideration
Representatives are asked for views about:
The issues identified and the WG’s views and observations
The WG’s planned approach to fact-finding, including its plan for roundtables
The WG’s planned timeline