Of the request and all the other available facts and

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Unformatted text preview: ices, a professional accountant in public practice may quote whatever fee deemed to be appropriate. The fact that one professional accountant in public practice may quote a fee lower than another is not in itself unethical. Nevertheless, there may be threats to compliance with the fundamental principles arising from the level of fees quoted. For example, a self interest threat to professional competence and due care is created if the fee quoted is so low that it may be difficult to perform the engagement in accordance with applicable technical and professional standards for that price. 240.2 The significance of such threats will depend on factors such as the level of fee quoted and the services to which it applies. In view of these potential threats, safeguards should be considered and applied as necessary to eliminate them or reduce them to an acceptable level. Safeguards which may be adopted include: (a) Making the client aware of the terms of the engagement and, in particular, the basis on which fees are charged and which services are covered by the quoted fee. (b) Making the client aware of the statutory duties and responsibilities involved, if any, in respect of the engagement. (c) Assigning appropriate time and qualified staff to the task. 240.2A Fees charged for assurance engagements should be a fair reflection of the value of the work involved and should take into account, among others: (a) the skill and knowledge required for the type of work involved; (b) the level of training and experience of the persons necessarily engaged on the work; (c) the time necessarily occupied by each person engaged on the work; and (d) the degree of responsibility and urgency that the work entails. 38 By-Laws (On Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants [Issued January 2007] PART I: BY-LAWS ON PROFESSIONAL ETHICS Contingent Fees 240.3 Subject to sections 290.210, 290.211 and 290.212, fees should not be charged on a contingent basis for assurance engagements. Contingent fees may however be used for certain types of non-assurance engagements1. They may, however, give rise to threats to compliance with the fundamental principles in certain circumstances. They may give rise to a self-interest threat to objectivity. The significance of such threats will depend on factors including: (a) The nature of the engagement. (b) The range of possible fee amounts. (c) The basis for determining the fee. (d) Whether the outcome or result of the transaction is to be reviewed by an independent third party. 240.4 The significance of such threats should be evaluated and, if they are other than clearly insignificant, safeguards should be considered and applied as necessary to eliminate or reduce them to an acceptable level. Such safeguards may include: (a) An advance written agreement with the client as to the basis of remuneration. (b) Disclosure to intended users of the work performed by the professional accountant in public practice a...
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This document was uploaded on 09/23/2013.

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