RSA to cap non-audit fees
The RSA Insurance Group is to put a cap on the amount of non-audit fees that their auditors can earn. The capped amount will be 25% of the total audit fee.
KPMG which are the company’s current auditors earned a total of £7.2m in 2013, of which £2.2m was for non-audit services. Some £1.3m of those non-audit services related to the identification of financial and claims irregularities in RSA’s Ireland division.
Previous to the appointment of KPMG as auditors, rival Big4 firm Deloitte was the company’s auditors. In 2012 Deloitte earned &15.7m, of which £9.5m related to non-audit services.
The company’s audit committee’s report states that the non-audit services policy will “assist with maintaining the independence of the external auditor and its personnel”.
Now only specifically defined services considered to be audit related can be performed by the auditor, and that all non-audit services must be approved by the committee first.
Last year, RSA’s internal audit division discovered irregularities within its claim and finance functions, equating to a £70m black hole. Further reviews, including work undertaken by PwC, found issues with the bodily claims department of its Irish division, seeing RSA announcing a £128m reserve strengthening.
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