Revised Code of Ethics in the Phils - 2010

For the purposes of this section fees are not

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Unformatted text preview: ation threat is also created when the fees generatedfrom an assurance client represent a large proportion of the revenue from anindividual partner’s clients. The significance of the threat shall be evaluatedand safeguards applied when necessary to eliminate the threat or reduce it toan acceptable level. An example of such a safeguard is having an additionalprofessional accountant who was not a member of the assurance teamreview the work or otherwise advise as necessary. Fees―Overdue 291.153 A self-interest threat may be created if fees due from an assurance clientremain unpaid for a long time, especially if a significant part is not paidbefore the issue of the assurance report, if any, for the following period.Generally the firm is expected to require payment of such fees before anysuch report is issued. If fees remain unpaid after the report has been issued,the existence and significance of any threat shall be evaluated andsafeguards applied when necessary to eliminate the threat or reduce it to anacceptable level. An example of such a safeguard is having anotherprofessional accountant who did not take part in the assurance engagementprovide advice or review the work performed. The firm shall determinewhether the overdue fees might be regarded as being equivalent to a loan tothe client and whether, because of the significance of the overdue fees, it isappropriate for the firm to be re-appointed or continue the assuranceengagement. Contingent Fees 291.154 Contingent fees are fees calculated on a predetermined basis relating to theoutcome of a transaction or the result of the services performed by the firm.For the purposes of this section, fees are not regarded as being contingent ifestablished by a court or other public authority. 291.155 A contingent fee charged directly or indirectly, for example through anintermediary, by a firm in respect of an assurance engagement creates aself-interest threat that is so significant that no 107 safeguards could reduce thethreat to...
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This document was uploaded on 04/03/2014.

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