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Unformatted text preview: s 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. 5 They 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 range of possible fee amounts. • The basis for determining the fee. • 240.4 The nature of the engagement. Whether the outcome or result of the transaction is to be reviewed by an independent third
party. The significance of any such threats shall be evaluated and safeguards applied when necessary to
eliminate or reduce them to an acceptable level. Examples of such safeguards include:
• Disclosure to intended users of the work performed by the professional accountant in public
practice and t...
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This document was uploaded on 04/03/2014.
- Spring '14