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The client and our firm have agreed on an initial estimated audit fee of $29,000 (see the engagement letter).

The client and our firm have agreed on an initial estimated audit fee of $29,000 (see the engagement letter). However, the estimated total cost of performing this year’s audit is $37,500 (see the fee budget on workpaper 6-5). Discuss possible reasons why a CPA firm might charge a new client an audit fee that is lower that the estimated first-year costs of perfoming the audit/

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