Chapter 9 - Ethics S4 Fees, Remuneration, Gifts, Litigation Flashcards
Fee dependence:
Listed (public)
REGULAR fee income
> 5% = diclose to ethics partner/those charged with governance
> 10% = cannot act as auditor
Fees dependence
Unlisted (private)
REGULAR fee income
> 10% = diclose to ethics partner/those charged with governance
> 15% = cannot act as auditor
What are the safeguards for Fee dependence?
Diclose to Ethics partner/those charged with governance
Monitor fee levels and try to reduce fees
EQCR (Hot review)
What is the rule for Non audit service fees (% in years)?
Not exceed 75% in 3 years
If it does, safeguards: disclose to ethics partners
If sufficient partners/staff are not assigned with time and skill to complete audit, what is the threat?
Self interest threat - save £?
Should audit fee be influence by non audit services?
NO
Are contingent fees allowed?
NO
What are the actions if last year’s audit fees has not been agreed?
Cannot accept appointment for next period
What is the action if non-trivial fees are overdue?
and what is the threat?
Consider whether they can continue
Self interest
If new firms find economic dependence difficult, what can they do?
Use external quality control reviewer
Should audit staff be assessed/paid to cross sell firm products?
NO
Should gifts be accepted?
what are the threats?
No unless trivial
Self interest and Familiarity
What should the auditor do if litigation is in process/threatened?
What are the threats
Self interest
Advocacy
Intimidation
