Audit Fees ( AASB 1054 March 2020 )

An

entity shall disclose fees to each auditor or reviewer, including any network firm, separately for:

the

audit or review of the financial statements; and

all

other services performed during the reporting period.

For

paragraph 10(b) above, an entity shall describe the nature of other services.

The AASB and the FRSB have relocated and amended the audit fee disclosure requirements contained in AASB 101 Presentation of Financial Statements and NZ IAS 1 Presentation of Financial Statements to their respective separate disclosure Standards and harmonised the disclosure requirements across both jurisdictions.

The AASB and the FRSB consider that the disclosure of audit fees is a matter of accountability and, given that the accountability environment is similar in both jurisdictions, they should have the same audit fee disclosure requirements. The Boards also took the opportunity to simplify the disclosure requirements on the basis that in recent times both preparers and users have indicated that disclosures in financial statements have become overly complex.

The AASB and FRSB noted the usefulness of the notion of ‘related practice’ in audit fee disclosures in AASB 101 and decided to incorporate a similar notion that is common to both jurisdictions in the harmonised disclosures. Accordingly, the Boards decided to include the notion of ‘network firm’ from APES 110 Code of Ethics for Professional Accountants issued by Accounting and Professional Ethical Standards Board (APESB) (February 2008) and Code of Ethics: Independence in Assurance Engagements issued by the NZICA (September 2008). The Boards also decided not to define or provide explanatory material for ‘network firm’ on the basis that the notion is generally understood and preparers and auditors could refer to the relevant APESB and NZICA pronouncements.

The AASB and FRSB note that disclosures are made in the context of the scope of the entity reporting. Accordingly, in the case of a group, disclosures made in accordance with paragraph 10 would include fees paid by the parent and its subsidiaries for each of the parent and its subsidiaries.