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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › contingent fees
Contingent fees are not permitted for non-assurance services provided to an audit client if:
1. The fee is material to the firm.
2. The outcome of the non- assurance service is dependent on a future judgment related to the audit of a material amount of the financial statements.
maam can you explain the 2nd point?
e.g. valuation of assets reported in the financial statements at valuation
Apologies maam but I am still unclear on this. I get that valuation of assets is a non-assurance service but how does its outcome depend on “future judgment related to the audit of a material amount of the financial statements”?
For example, a valuation of an asset may call for a value-in-use calculation that presumes going concern – which the auditor has still to assess for next year’s audit … and the year after that …