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Unformatted text preview: an acceptable level. Accordingly, a firm shall not enter into
anysuch fee arrangement.
291.156 A contingent fee charged directly or indirectly, for example through anintermediary, by a firm
in respect of a non-assurance service provided to anassurance client may also create a selfinterest threat. If the outcome of thenon-assurance service, and therefore, the amount of the fee,
is dependent ona future or contemporary judgment related to a matter that is material to
thesubject matter information of the assurance engagement, no safeguardscould reduce the
threat to an acceptable level. Accordingly, sucharrangements shall not be accepted.
291.157 For other contingent fee arrangements charged by a firm for a non-assuranceservice to an
assurance client, the existence and significance ofany threats will depend on factors such as:
• The range of possible fee amounts; • Whether an appropriate authority determines the outcome of the matterupon which the
contingent fee will be determined; • The nature of the service; and • The effect of the event or transaction on the subject matter information. The significance of any threats shall be evaluated and safeguards appliedwhen necessary to
eliminate the threats or reduce them to an acceptablelevel. Examples of such safeguards
• Having a professional accountant review the relevant assurance workor otherwise advise as
necessary; or • Using professionals who are not members of the assurance team toperform the nonassurance service. Gifts and Hospitality
291.158 Accepting gifts or hospitality from an assurance client may create self-interestand familiarity
threats. If a firm or a member of the assurance teamaccepts gifts or hospitality, unless the value
is trivial and inconsequential,the threats created would be so significant that no safeguards
could reducethe threats to an acceptable level. Consequently, a firm or a member of
theassurance team shall not accept such gifts or hospitality. Actual or Threatened Litigation
291.159 When litigation takes place, or appears likely, between the firm or amem...
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This document was uploaded on 04/03/2014.
- Spring '14