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Sir, if i as an Auditor and have shares in the client , is it a must that i sell that i sell those shares when there are no threats? Will i be infringing the rules?
Secondly, how does outstanding fees imposed possible threats because according to the safeguard, it says do not start the audit work until outstanding fees are paid.
What are contingent fees And how can it impose threats.Thanks in advance.
You have to sell the shares so as to be seen to be independent.
The ethical framework is:
Identify threats to the ethical principles
Take steps to mitigate or eliminate those.OS fees are a threat, because you want them to be paid and this gives the client a hold over you….”Give us a clean audit report and you will be paid immediately”. So that threat can be avoided by not starting the new audit until paid.
Contingent fees depend on the audit report: Unmodified report $200,000; modified opinion $50,000. There is clearly a self interest threat as you are being encouraged to give a clean report.
Thank you so much but client requesting contingent fees from Auditor could be outrageous ,i do hope to ever be subjected to otherwise , will it be better that an independent partner review be engaged ?
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