Companies Act 2014 section 1618

Prohibited non-audit services in case of assurance of sustainability reporting of public-interest entity

Section 1618 restricts the non-audit services that a statutory auditor or audit firm (and their network members) may provide when they are engaged to carry out the assurance of sustainability reporting for a public-interest entity.

• Certain specified non-audit services are prohibited from being provided to the assured entity, its holding undertaking, or its EU-controlled undertakings during the assurance period and, for one category of service, during the immediately preceding financial year.
• Non-audit services that are not on the prohibited list may still be provided, but only after the audit committee has assessed threats to independence and applied appropriate safeguards, and has given its approval.
• Where a network member provides prohibited services to a controlled undertaking incorporated outside the EU, the auditor or audit firm must assess whether this compromises their independence and, if so, must apply safeguards to mitigate the resulting threats.
• The auditor or firm may continue with the sustainability reporting assurance engagement only if they can demonstrate that the provision of such services by a network member in a third country does not impair their professional judgement or the assurance report.