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Unformatted text preview: the outcome or result of the transaction is to be reviewed by an independent third
party. 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 1
Contingent fees for non-assurance services provided to audit clients and other assurance clients are discussed in Sections 290 and 291 of this Code. 35 particular, the basis on which fees are charged and which services are covered by the quoted fee;
and (b) assigning appropriate time and qualified staff to the task.
240.4 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:
• An advance written agreement with the client as to the basis of remuneration. • Disclosure to intended users of the work performed by the professional accountant in public
practice and the basis of remuneration. • Quality control policies and procedures. • Review by an independent third party of the work performed by the professional accountant
in public practice. 240.5 In certain circumstances, a professional accountant in public practice may receive a referral fee or
commission relating to a client. For example, where the professional accountant in public practice
does not provide the specific service required, a fee may be received for referring a continuing
client to another professional accountant in public practice or other expert. A professional
accountant in public practice may receive a commission from a third party (for example, a
software vendor) in connection with the sale of goods or services to a client. Accepting such a
referral fee or commission creates a self-interest threat to objectivity and professional...
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- Spring '14