Ojo, Mariane.B. Regulating Non Audit Services:Towards a Principles Based Approach to Regulation. Regulating Non Audit Services:Towards a Principles Based Approach to Regulation.
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Abstract
Based on the argument that the benefits conferred through the provision of non audit services by audit firms outweigh the attributed costs of safeguarding the auditor's independence, this paper will not only seek to justify this argument, advance proposals which do not favour an outright prohibition of the provision of non audit services, but also consider means through which non audit services could be regulated in order to facilitate competition in the audit market. At the same time it will consider various legislation which have been introduced in recent years and which are aimed at facilitating greater disclosure of information – hence improving transparency within the audit and financial markets. “Specific measures,” it is contended, “would involve not only the introduction of new standards (for example – the disclosure of client concentration) but also the elimination of current restrictions“. Different types of safeguards which exist in order “to mitigate or eliminate threats” to the auditor’s independence, as a result of the provision of non audit services, will be considered against the regulator’s aim to facilitate competition, enhance disclosure and promote other practices which would advance the regulator’s endeavour to be more “market friendly”. The consultation on control structures in audit firms and their consequences on the audit market, a consultation which was launched by the European Commission as part of its efforts to create more market players, could be regarded as a response to such proposals to facilitate a more “market friendly” environment and also to concerns that the financial market is already over regulated. Some of the possible ways advanced by the Commission as channels for facilitating greater entry into the international market include the deregulation of the capitalisation of audit firms as a catalyst for facilitating greater entry into the audit market. Deregulation of the capital structure in this sense is considered to be a “modification of Article 3 (4) of the 2006 Directive on Statutory Audit which should however not be to the detriment of robust independence rules.”
| Item Type: | Article |
|---|---|
| Subjects: | H Social Sciences > HG Finance |
| Divisions: | Faculty of Law, Arts and Social Sciences > School of Social Sciences |
| Depositing User: | Mr Solomon Bayoko |
| Date Deposited: | 04 Nov 2013 11:13 |
| Last Modified: | 04 Nov 2013 11:13 |
| URI: | http://eprints.covenantuniversity.edu.ng/id/eprint/1815 |
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