Revised Code of Ethics in the Phils - 2010

Contingent fees 290224 contingent fees are fees

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Unformatted text preview: the threat to an acceptable level, and apply the selected safeguard: • Prior to the issuance of the audit opinion on the second year’s financial statements, a professional accountant, who is not a member of the firm expressing the opinion on the financial statements, performs an engagement quality control review of that engagement or a professional regulatory body performs a review of that engagement that is equivalent to an engagement quality control review (“a pre-issuance review”); or • After the audit opinion on the second year’s financial statements has been issued, and before the issuance of the audit opinion on the third year’s financial statements, a professional accountant, who is not a member of the firm expressing the opinion on the financial statements, or a professional regulatory body performs a review of the second year’s audit that is equivalent to an engagement quality control review (“a post-issuance review”). When the total fees significantly exceed 15%, the firm shall determine whether the significance of the threat is such that a post-issuance review would not reduce the threat to an acceptable level and, therefore, a preIESBA issuance review is required. In such circumstances a preissuance review shall be performed. Thereafter, when the fees continue to exceed 15% each year, the disclosure to and discussion with those charged with governance shall occur and one of the above safeguards shall be applied. If the fees significantly exceed 15%, the firm shall determine whether the significance of the threat is such that a post-issuance review would not reduce the threat to an acceptable level and, therefore, a pre-issuance review is required. In such circumstances a pre-issuance review shall be performed. Fees―Overdue 290.223 A self-interest threat may be created if fees due from an audit client remain unpaid for a long time, especially if a significant part is not paid before the issue of the audit report for the following year. Generally the firm is expected to require payment of such fees before such audit report is issued. If fees remain unpaid after the report...
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This document was uploaded on 04/03/2014.

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