ACCA F8考試：Fees

ACCA F8考試：Fees

1 Audit and Assurance Work

1.1 Basis of Fees

The auditor is in business. As business people, auditors will expect to earn a reasonable return for their work, effort and expertise, and to make a profit.

The level of fees charged for each assignment is basically a commercial decision. A standard approach is to base the fees quoted (and/or charged) to reflect the time spent and the skills and experience of the staff involved. For example, the more complex or higher the risk of the assignment, the greater the level of expertise (e.g. manager and partner level) required, resulting in a higher fee.

The basis of the fee should be stated in the engagement letter together with any arrangements for the timing and delivery of documents, processes, information and other audit requirements by the client (e.g. books and records, schedules to be audited).

If the expected fee is exceeded (e.g. because of spending more time on a particular area), the recoverability of additional fees should be discussed with the client. Good client management includes giving warning of such a possibility due to factors:

caused directly by the client (e.g. non-delivery of items as agreed in the engagement letter resulting in additional work by the auditor); or

outside the control of the auditor and client (new legal requirements).

For new clients, it is important that a sustainable fee is initially quoted. This will require a reasonable understanding of the business and the level of work which will be required (e.g. initial time and service-level budgets).

1.2 Contingency Fees

It is unacceptable to charge audit and assurance fees on the basis of a percentage of profits or on a contingency basis (e.g. "if we qualify our report, then no fee"). Special offers (e.g. "buy one, get one free") are also strictly prohibited.

Such action calls into doubt the professional's integrity and independence, and also may be considered as bringing the profession into disrepute.

In areas other than audit and assurance, contingency or flat rate fees may be charged, provided such action does not bring the profession into disrepute. Examples include:

Fixed fees for standard preparation of accounts and completion of tax returns.

Contingency fees for certain consultancy services (e.g. management buyouts or raising venture capital) where the ability to pay depends on the success or failure of the project.

2 Lowballing

"Lowballing" (also "low balling") or "predatory pricing" occurs when a firm seeks to increase its market share or retain a client by dropping its quote for an audit fee to undercut its competitors or preempt a possible tender situation.

There is a public perception that such action would cause the quality of the audit to decline (e.g. because the quoted fee is below cost) especially where, after a competitive tender, the current auditor retains the client but with a significant reduction in fees.

Also, although a client may be won or retained through a low audit fee, any "loss" may be more than compensated by fees obtained for additional services. This creates a self-interest threat to independence. However, "loss leadership" may not be an effective business strategy because the Sarbanes-Oxley Act prohibits US-listed company auditors from providing other services to audit clients, and corporate governance codes require greater oversight of other services auditors can provide (e.g. under the UK Corporate Governance Code).

The ACCA's Code of Ethics does not specifically prohibit lowballing. However, the quality of an assurance engagement cannot be (or perceived to be) compromised by low fees. If there is a perception that quality has been compromised, then the auditor's integrity and independence is threatened.

The only safeguard against this is for the auditor to clearly demonstrate that no compromise has occurred; otherwise, the engagement must be declined.

The level of fees from year to year (especially on new clients and where reappointment results in a reduction) is one aspect of monitoring firms (by a recognised supervisory body).

Particular attention will be paid to the time spent, level of work and seniority of staff assigned to the audit in such cases.

If, in the course of an investigation into unsatisfactory work, there is evidence of the work having been obtained or retained by quoting an uneconomic fee (e.g. at below cost), such evidence will be considered in determining appropriate disciplinary action.