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Kim Smith.
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jaemx
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How does contingent fee result in an advocacy threat?
Kim Smith
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It DEPENDS on what the contingent fee relates to – e.g. see in our notes (which are downloadable and searchable):
3.3 Advocacy threats
Advocacy is where the assurance or audit firm promotes a point of view or opinion to the extent the subsequent objectivity is compromised. An example would be where the audit firm promotes the shares in a listed company or supports the company in some sort of dispute (eg with the tax authorities).It is in the nature of contingent fees that the auditor’s interest will become aligned with management’s – wanting (and therefore promoting) the same outcome.
jaemx
Kim SmithViewing 2 posts - 1 through 2 (of 2 total)
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