Accountants will not have to give up their non-audit work for audit clients, under proposed guidelines released today, which have not recommended an outright ban, suggested by politicians in the wake of the financial crisis.
The Auditing Practices Board, which publishes guidance for auditors, does not believe an outright ban on non-audit services should be enacted and has instead proposed to tinker with present disclosure requirements.
Changes would include additional guidance on what is and isnt not audit services along with new in depth guidelines on what audit committees should consider when considering hiring a firm.
The APBs review of non-audit services grew out of the Treasury Select Committees report into the banking crisis.
At the time the committee said it strongly believed that investor confidence and trust in audit would be enhanced by a prohibition on audit firms conducting non-audit work for the same company.
The new guidance falls short of the recommendation. The APB said the vast majority of respondents did not favour a prohibition on auditors.
The news will likely be welcomed by auditors which often benefit attract lucrative fees from non-audit work. While in listed companies the ratio of audit to non-audit work has been I steady decline since the Enron scandal of 2002, in non-listed companies it continues to be a thriving business.
During Deloittes audit of failed car maker MG Rover, the ratio of audit to non audit fees was revealed to be 15:1.