Q3.1.8 What needs to be considered in situations where a second opinion from a
professional accountant is requested by a non-existing client? (5)
The professional accountant needs to consider the following:
- If there are any valid reasons that cause the client to require a second opinion. The
accountant needs to carefully consider if the client might have any unethical motives
for wanting a 2nd opinion
- If permission has been grated for the professional accountant to contact the
professional accountant that issued the 1st opinion. The discussion between the two
professional accountants will seek to establish is the same set of facts were given to
both accountants, the methods and rationale used by the 1 st accountant to reach his /
her conclusion and the opinion that he / she issued.
- Furthermore, the accountant needs to tread carefully as a 2nd opinion may be viewed
as criticism of the other professional accountant.
Q3.1.9 What must be taken into account when the professional accountant determines a
fair normal fee for professional services rendered to a client? (8)
- The professional accountant needs to remember that he / she is entitled to fair
remuneration for professional services rendered.
- Thus, the professional accountant is prohibited from undercharging or overcharging
clients
-For audit services specifically, the professional accountant needs to remember that a
fixed fee is disallowed, the client must be provided with a basis for charging (eg. A rate
per hour and also an estimate of the total hours that are expected). Very importantly,
the client must be alerted to the fact that the total hours are a best estimate only and
can change if unexpected delays occur during the audit.
-In determining the total fee at the end of the service, factors like time spent; number,
level and experience of staff used; use of any specialised skills (experts); resources
used, etc will be used
Q3.1.10 Describe what needs to be considered by the professional accountant before
accepting referral fees and/or commissions. (4)
-The professional accountant needs to remember that he / she needs to comply with the
fundamental principles even if he / she pays or received referral fees or commission
income.
professional accountant is requested by a non-existing client? (5)
The professional accountant needs to consider the following:
- If there are any valid reasons that cause the client to require a second opinion. The
accountant needs to carefully consider if the client might have any unethical motives
for wanting a 2nd opinion
- If permission has been grated for the professional accountant to contact the
professional accountant that issued the 1st opinion. The discussion between the two
professional accountants will seek to establish is the same set of facts were given to
both accountants, the methods and rationale used by the 1 st accountant to reach his /
her conclusion and the opinion that he / she issued.
- Furthermore, the accountant needs to tread carefully as a 2nd opinion may be viewed
as criticism of the other professional accountant.
Q3.1.9 What must be taken into account when the professional accountant determines a
fair normal fee for professional services rendered to a client? (8)
- The professional accountant needs to remember that he / she is entitled to fair
remuneration for professional services rendered.
- Thus, the professional accountant is prohibited from undercharging or overcharging
clients
-For audit services specifically, the professional accountant needs to remember that a
fixed fee is disallowed, the client must be provided with a basis for charging (eg. A rate
per hour and also an estimate of the total hours that are expected). Very importantly,
the client must be alerted to the fact that the total hours are a best estimate only and
can change if unexpected delays occur during the audit.
-In determining the total fee at the end of the service, factors like time spent; number,
level and experience of staff used; use of any specialised skills (experts); resources
used, etc will be used
Q3.1.10 Describe what needs to be considered by the professional accountant before
accepting referral fees and/or commissions. (4)
-The professional accountant needs to remember that he / she needs to comply with the
fundamental principles even if he / she pays or received referral fees or commission
income.
