Prohibition of audit firms from providing non-audit services

Prohibition of audit firms from providing non-audit services

Increase auditor independence thereby addressing deficient performance component of the audit expectation gap

Argument in support

• Provision of non-audit services creates a financial bond which inhibits auditor independence

• Additionally, the threat of loss of anticipated revenue could influence the behaviour of the auditor, thus reducing their objectivity

Arguments against

• Provision of non-auditing services by audit firms improves audit quality by enhancing auditor’s knowledge of client’s business