Unformatted text preview: nts 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; © the time necessarily occupied by each person engaged on the work; and (d)
the degree of responsibility and urgency that the work entails.
240.1 When entering into negotiations regarding professional services, a professional accountant in
public practice may quote whatever fee is deemed 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 existence and significance of any threats created will depend on factors such as the level of
fee quoted and the services to which it applies. The significance of any threat shall be evaluated
and safeguards applied when necessary to eliminate the threat or reduce it to an acceptable level.
Examples of such safeguards include:
240.3 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.
Assigning appropriate time and qualified staff to the task. Contingent fees are widely used for certain types of non-assurance engagements. 1They may,
however, create threats to compliance with the fundamental principles in certain circumstances.
They may create a self-interest threat to objectivity. The existence and significance of such
threats will depend on factors including:
• The nature of the engagement. • The range of possible fee amounts. • The basis for determining the fee. • Whether...
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- Spring '14