Shedding light on audit vs non-audit fees

Fann Kor and Kang Wai Geat

MANY were surprised by what happened recently at ComfortDelGro’s annual general meeting (AGM). Under the recommendation of proxy advisers, shareholders voted against the reappointment of the auditor, Deloitte & Touche (Deloitte). The reason was that ComfortDelGro had paid Deloitte non-audit fees that exceeded 50 per cent of its audit fees. The non-audit fees seemingly relate to initial public offering (IPO) work performed in Australia as publicly announced.

This incident has raised questions on non-audit fees and the 50 per cent threshold.