Code of Ethics to Professional Accountants in Public Practice: Fees and Other Types of Remuneration


  • Professional Fees
    • Professional fees should be a fair reflection of the value of the professional services performed for the client, taking into account:
      • The skill and knowledge required for the type of professional services involved.
      • The level of training and experience of the persons necessarily engaged in performing the professional services.
      • The time necessarily occupied by each person engaged in performing the professional services.
      • The degree of responsibility that performing those services entails.
    • The fact that one professional accountant in public practice may quote a fee lower that another is not in itself unethical. Nevertheless, there may be a self-interest threat to professional competence and due care created if the fee quoted is so low that it may be difficult to perform the engagement in accordance with applicable technical and professional standards for the price.
    • Appropriate safeguards which may be adopted include:
      • Making the client aware of the terms of the engagement and, in particular, the basis on which fees are charged and and which services are covered by the quoted fee.
      • Assigning appropriate time and qualified staff to the tasks.
  • Contingent Fees
    • Contingent fees may give rise to a self-interest threat to objectivity. The significance of such threats will depend on factors including:
      • The nature of the engagement.
      • Whether the outcome or result of the transaction is to be reviewed by an independent third party.
      • The basis for determining the fee.
      • The range of possible fee amounts.
    • Appropriate safeguards may include:

      • Review by an objective third party of the work performed by the professional accountant in public practice.
      • Quality control policies and procedures.
      • Disclosure to intended users of the work performed by the professional accountant in public practice and the basis of remuneration.
      • An advance written agreement with the client as to the basis of remuneration.
  • Referral Fees of Commission
    • In certain circumstances, a professional accountant in public practice may receive referral fee or commission relating to the client. For example, where the professional accountant in public practice does not provide the specific service required, a fee may be received from referring a continuing client to another professional accountant in public practice or an expert. A professional accountant in public practice may receive a commission from a third party (e.g., a software vendor) in connection with the sale of goods or services to a client. Accepting such a referral fee or commission may give rise to self-interest threats to objectivity, professional competence, and due care.
    • A professional accountant in public practice may also pay a referral fee to obtain a client, for example, where the client continues as a client to another  professional accountant in public practice but requires specialist services not offered by the existing accountant. The payment of such a referral fee may also create a self-interest threats to objectivity, professional competence, and due care.
    • A professional accountant in public practice should not pay or receive a referral fee or commission, unless the professional accountant in public practice has established safeguards to eliminate the threats or reduce them to an acceptable level. Such safeguards may include:
      • Disclosing to the client any arrangements to pay a referral fee to another professional accountant for the work referred.
      • Disclosing to the client any arrangements to receive a referral fee for referring the client to another professional accountant in public practice.
      • Obtaining advance agreement from the client for commission arrangements in connection with the sale by a third party of goods or services to the client. 
    • A professional accountant in public practice may purchase all or part of another from on the basis that payments will be made to individuals formerly owning the firm or to their heirs or estates. Such payments are not regarded as commissions or referral fees for the purpose of this rule. 

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