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Sorry i didnt get what you said.how exactly is objectivity or independence lost in the threat you are referring.
Can you be more elaborative?
This is an extract from the (verbose) Revised Ethical Standard 2016 issued by the Financial Reporting Council
“4.42 Where it is expected that the total fees for services receivable from a public interest entity or other listed entity and its subsidiaries relevant to a recurring engagement by the firm will regularly exceed 10% of the annual fee income of the firm or …………… the firm shall not act as the provider of the engagement for that entity and shall either resign or not stand for reappointment, as appropriate”
The figure of 10% is increased to 15% for entities that are neither “a public interest entity or other listed entity and its subsidiaries”
This was the point that I was trying to make … where the additional income from the non-audit assignment could take the fee income from that single client above the 10% / 15% threshold of the firm’s annual revenue
Beyond that threshold it is perceived that a firm becomes too heavily dependent upon that income and will thus lose its professional independence and objectivity … and thus, it’s a threat
Better?
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