Specific approval is required before the external auditors are contracted to undertake any non-audit work. Consideration will be given to proposals for non-audit work in accordance with the following sections from the Financial Reporting Council’s Ethical Standard Section 5B, (5.40 – 5.42) as well as Appendix A of this University policy.
SECTION 5B - Approach to Non-audit / Additional Services Provided to Public Interest Entities
Permitted Non-audit / Additional Services for Public Interest Entities
5.40 An audit firm carrying out statutory audits of public interest entities and, where the audit firm belongs to a network, any member of such network, shall not provide to the audited entity, to its UK parent undertaking or to its worldwide controlled undertakings, services other than those set out in the rest of this paragraph, subject to the approval of the audit committee after it has properly assessed threats to independence and the safeguards applied in accordance with this Ethical Standard:
Services required by law or regulation and exempt from the non-audit services cap
• Reporting required by a competent authority or regulator under law or regulation for example;
- Reporting to a regulator on client assets;
- in relation to entities regulated under the Financial Services and Markets Act 2000 (FSMA), reports under s166 and s340 of FSMA;
- Reporting to a regulator on regulatory financial statements;
- Reporting on a Solvency and Financial Condition Report under Solvency II.
• In the case of a controlled undertaking incorporated and based in a third country, reporting required by law or regulation in that jurisdiction where the auditor is permitted to undertake that engagement;
• Reporting on internal financial controls when required by law or regulation;
• Reporting on the iXBRL tagging of financial statements in accordance with the European Single Electronic Format for annual financial reports;
• Reports, required by or supplied to competent authorities / regulators supervising the audited entity, where the authority / regulator has either specified the auditor to provide the service or identified to the entity that the auditor would be an appropriate choice for service provider;
• Services which support the entity in fulfilling an obligation required by UK law or regulation, including listing requirements where: the provision of such services is time critical; the subject matter of the engagement is price sensitive; and an it is probable that an objective, reasonable and informed third party would conclude that the understanding of the entity obtained by the auditor for the audit of the financial statements is relevant to the service, and where the nature of the service would not compromise independence;
Services subject to the non-audit services cap
• Reviews of interim financial information; and providing verification of interim profits not otherwise required by law or regulation;
• Where not otherwise required by law or regulation, non-audit and additional services, as defined in this Ethical Standard provided as auditor of the entity, or as reporting accountant, in relation to information of the audited entity for which it is probable that an objective, reasonable and informed third party would conclude that the understanding of the entity obtained by the auditor is relevant to the service, and where the nature of the service would not compromise independence;
• Extended audit or assurance work that is authorised by those charged with governance performed on financial or performance information and/or financial or operational controls, in an entity relevant to an engagement or a third-party service provider, where this work is closely linked with the audit work;
• Additional assurance work or agreed upon procedures, authorised by those charged with governance performed on material included within or referenced from the annual report of an entity relevant to an engagement;
• Reporting on government grants;
• Reporting on covenant or loan agreements, which require independent verification, and other reporting to third parties with whom the entity relevant to an engagement has a business relationship in accordance with Appendix C of this Ethical Standard;
• Services which have been the subject of an application to the Competent Authority in accordance with Regulation 79 of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (SI 2019/177);
• Generic subscriptions providing factual updates of changes to applicable law, regulation or accounting and auditing standards.
Where such services are provided, they shall not include any elements of those services subject to outright prohibition in Regulation 80 of The Statutory Auditors and Third Country Auditors (Amendment) (EU Exit) Regulations 2019 (SI 2019/177)51. The prohibitions in this Regulation have been amended to require an extended cooling in period for services linked to an audit entity’s internal audit function. No other non-audit or additional services shall be provided to the audited entity, its UK parent undertaking and its worldwide controlled undertakings by the audit firm or any member of the firm’s network.
5.41 If a non-permitted service is inadvertently provided, the audit firm may continue to carry out the statutory audit of the public interest entity only if it can justify, that such provision of services does not affect its professional judgment and the audit report. The audit firm shall report this in its auditor’s report on the entity’s accounts in accordance with paragraph 45-1(d) of ISA (UK) 700.
5.42 An audit firm undertaking the statutory audit of an entity relevant to an engagement, which is not a public interest entity, but meets the definition for an other entity of public interest shall follow the requirements in paragraphs 5.40-5.41.
 In accordance with this Ethical Standard and Schedule 1 to the Statutory Auditors and Third
Country Auditors Regulations 2016.
 Further to Brexit, it is understood that where the Standard references EU law, it is understood this is now only relevant to ‘retained EU law’ (which is part of UK law).