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Good day, my question is as regards audit fees, the revision mock question says that it should not be more than 10% but i read elsewhere that it should not be more than 15% of a firm’s annual income, i need your clarification on this, thank you.
The IESBA Handbook, para 290.222 now states:
When the total fees from an audit client represent a large proportion of the total
fees ofthe firm expressing the audit opinion, the dependence on that client and
concern about losing the client creates a self-interest or intimidation threat…..…Where an audit client is a public interest entity and, for two consecutive years, the total fees from the client and its related entities … represent more than 15% of the total fees received by the firm expressing the opinion on the financial statements of the client, the firm shall disclose to those charged with governance of the audit client the fact that the total of such fees represents more than 15% of the total fees received by the firm ,
and discuss which of the safeguards below it will apply to reduce the threat to an acceptable level.,
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