Auditing and Assurance

In: Business and Management

Submitted By lawatahi
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In 2014 the European Union proposed further restrictions on the non-audit services that auditing firms can provide to their audit clients.

(1) Discuss the benefits and disadvantages of auditors providing non-audit services to clients

The objective of this assignment is to examine the benefits and disadvantages of auditors providing non-audit services to their clients. Further discussing in what ways the European Union proposals may prove beneficial and in what ways they may be disadvantageous.

Auditing is considered an exceedingly complex process, maintaining a relevant and valuable insight to a company’s financial statements and its reports based on the conduct of their audits. (Gray, I. and Manson, S. 2011). An auditor’s priority is to provide assurance services through evaluating; providing the best financial or non-financial information to clients. (, 2015). Therefore this allows the clients to make the best informed decisions regarding their business. In the recent times, the appearance of professional service firms has resulted from a growing demand for specialist advice to help them achieve business advantage in the competitive market. In May 2014 the European commission published a directive, amending the Statutory Audit directive and a new Audit regulation. (Campa, D. and Donnelly, 2015). Non-audit services that are provided by auditors consist of management consultancy, tax advice and human resources consultancy. These services are aimed to increase the efficiency and effectiveness of an audit and the identity of being consulted on mistakes and improvements. (, 2015). However, there is a vast amount of views that differ on the relation of non-audit services provided. On one hand, many people believe it compromises the auditor’s independence as well as a conflict of interest, whereas others believe that providing non-audit…...

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