Provision of Non-Audit Services to Listed Entities

On 7 September 2022, ISCA, through its Ethics Committee (EC), revised EP 100 to adopt four IESBA’s final pronouncements relating to (a) non-assurance services (NAS), (b) fees, (c) objectivity of an engagement quality reviewer and other appropriate reviewers, and (d) quality management-related conforming amendments. 

In the process, EP 100 has replaced extant paragraph SG410.4A with revised paragraph SG410.27A, which is applicable to audit firms with audit clients that are listed entities. It also introduces a new term, “audit-related services” (ARS), in the Glossary. EP 100 (revised on 7 September 2022) is effective 15 December 2022.

The revised paragraph SG410.27A scopes out from the fee proportion computation:

(i) non-audit services fees earned by the firm or its network firms from the audit client’s parent and sister entities; and

(ii) ARS fees.

ISCA EC has developed EP 100 IG 5 Frequently Asked Questions On Provision Of Non-Audit Services To Listed Entities to provide guidance to assist professional accountants in public practice in applying the revised paragraph SG410.27A and new concept of ARS.

Of note, FAQ 2 of EP 100 IG 5 explains what ARS are, including how it relates to non-audit services and non-assurance services (NAS). FAQ 2 also sets out a non-exhaustive list of examples of ARS and the rationale behind the inclusion of each example as ARS whilst FAQ 3 provides an illustrative example of fee proportion computation under revised paragraph SG410.27A. 


The article “Shedding Light on Audit vs Non-Audit Fees”, published in the June 2022 issue of ISCA journal, explained why auditors were usually appointed to provide non-audit services and elaborated on the relevance of a 50% threshold (i.e., revised paragraph SG410.27A). An edited version of this article was first published in The Business Times on 30 May 2022.

The article “Provision Of Non-Audit Services To Listed Entities”, published in the November 2022 issue of ISCA journal, was a follow-up piece to the June 2022 article and explained the application of the revised paragraph SG410.27A, and the new concept of ARS to audit clients that are listed entities.


The ACRA Code of Professional Conduct and Ethics for Public Accountants does not prohibit non-audit fees from exceeding 50% of the audit fees. What this means is, if the amount of annual fees received for non-audit services compared to the total annual audit fees from a listed audit client is 50% or more, the auditor shall disclose this to those charged with governance (TCWG) of the audit client. They shall also discuss the safeguards which will be applied to reduce any threats to auditor independence to an acceptable level.

In essence, the 50% marker exists to address a situation where, if non-audit fees exceed audit fees, the auditor may be pressured to sign off the audit opinion on the financial statements for fear of losing the client due to the size of the fees. If the 50% is crossed, the auditor will need to disclose and discuss with TCWG, who are usually the audit committees. This, however, does not mean that auditor independence has been impaired.

The 50% is set as a guideline rather than a rule.

(Source: “Shedding Light on Audit vs Non-Audit Fees”, ISCA Journal, June 2022)