Michigan Agreement for Auditing Services between Accounting Firm and Municipality
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FAQ
The prohibited nonaudit services included corporate secretarial services, payment facilitation, payroll outsourcing, loaned staff, financial information system design or implementation, bookkeeping, internal audit outsourcing, and investment advisory services.
The engagement letter documents and confirms the auditor's acceptance of the appointment, the objective and scope of the audit, the extent of the auditor's responsibilities to the client and the form of any reports.
Ing to these guidelines, audit firms are required to have a code of ethics which prohibits them from providing services which could be seen as compromising their independence. Section 144 of the Companies Act 2013 imposes restrictions on the services that auditors can provide.
The auditor must not perform management functions or make management decisions for the client.
Q: The rules for five of the prohibited services (bookkeeping, internal audit outsourcing, valuation services, actuarial services, financial information system design and implementation) allow the services to an audit client when "it is reasonable to conclude that the results of these services will not be subject to ...
(i) direct financial interest or materially significant indirect financial interest in a client, (ii) loan or guarantee to or from the concerned client, (iii) undue dependence on a client's fees and, hence, concerns about losing the engagement, (iv) close business relationship with an audit client, (v) potential ...
