Oct 5, 2024
The Accounting and Financial Reporting Council ("AFRC") has published an article titled Safeguarding Auditor Independence: Concerns Surrounding Procurement and Purchases from Audit Clients, The article highlights the AFRC’s concerns regarding potential threats to auditor independence that may arise from procurement and purchases involving audit clients.
"As an overarching principle, audit firms and their personnel must remain alert to any transactions with their audit clients and the potential impact on their independence. Audit firms should actively identify and mitigate independence threats from procurement and purchases from audit clients. In addition, the AFRC highlights four key independence principles for reminding audit firms and professional accountants to uphold their independence:
a) Maintain proper corporate governance to set the right tone at the top, promoting ethical values that support auditor independence;
b) Establish a comprehensive independence policy to guide the behaviour of audit firms and their personnel regarding procurement and purchases from audit clients;
c) Implement rigorous measures for on-going monitoring of independence threats; and
d) Perform thorough diligent investigations of potential breaches to promptly mitigate independence risks."
For the full article, please click : Safeguarding Auditor Independence: Concerns Surrounding Procurement and Purchases from Audit Clients