Mitchell: EU Audit Directive and effect of NAS restrictions

The clampdown on the percentage of non-audit services (NAS) under the EU Audit Directive, currently out to consultation, will create a white list of accepted services which auditors can perform, which in the long term should strengthen audit committees, says Nikki Mitchell, audit partner, FTSE 100, at Deloitte

January 2015 kicked off with two consultation papers on audit reform, one from the Financial Reporting Council (FRC) and another from the Department for Business, Innovation and Skills (BIS). The aim was to discuss options for the UK implementation of the EU Audit Directive and Audit Regulation, while building on the work of the Competition and Markets Authority (CMA).

BIS is proposing to give FRC the power to decide on non-audit services (NAS) restrictions. The FRC has written a balanced paper exploring the pros and cons of various approaches, considering the public interest and the balance between simplicity and pragmatism.

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