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Hello,
I am sitting F8 exam for the second time in December 2014
When studying for my first sitting of F8 4 years ago, the ethical guidance on fees was that if the fees from a publicly listed client exceeded 5% of overall practice income for a year, then “monitoring procedures” were put in place and if the fees exceeded 10% of overall practice income for a year, then the auditor needed to consider resigning. These benchmarks were 10% and 15% for a non listed audit client…am i correct in saying that this guidance has now been removed from Ethical Standard 4 and replaced by the info in the paragraph below???….
Now, am i correct in saying that for “public interest entities” there is a 15% threshold based on 2 years practice income with a need for a post/pre issuance review as appropriate……
Can you please confirm
Thanks
LiamYou are correct. From the ACCA’s rule book
290.219
Where an audit client is a public interest entity and, for two consecutive years,
the total fees from the client and its related entities (subject to the considerations
in paragraph 290.27) 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, and apply the selected safeguard:…..etc
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