Syllabus C2: Advertising, publicity, obtaining

professional work and fees

Syllabus C2a) Evaluate the appropriateness of publicity material including the use of the
ACCA logo and reference to fees.
Acceptable Advertising
They should inform and not try to impress
Generally they should not reflect badly on the member, the ACCA or the accounting
profession as a whole
Acceptable publicity includes:
1. Appointments and awards
2. Seeking employment or professional business
3. Professional directories
4. Books, article, interviews, lectures, media appearances
5. Training courses and seminars
Advertisements and promotional material must not:
1. Bring ACCA into disrepute
2. Discredit the services offered by others
3. Claim superiority
4. Mislead
5. Be legal, decent & truthful
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Names & Descriptions
Members may be called Chartered Certified Accountants, but not
companies
The firm may describe itself as ‘Chartered Certified Accountants’ if...
• At least half the partners or directors are ACCA members
• They control at least 51% of the voting rights
If all partners in the firm are ACCA members they may state this on their stationery.
If some partners are members of another accountancy body however, this must be
made
clear.
Use of ACCA logo
Acceptable if:
• At least 1 partner is an ACCA member
• The logo is separate from the firm logo
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Syllabus C2b) Outline the determinants of fee- setting and justify the bases on which
fees and commissions may and may not be charged for services.
Fees
The basis of calculation (e.g. hourly) must be clearly stated
Any reference to fees must not mislead the reader about the precise range of services
and
time commitment that it relates to
You can compare your fee to others if..
1. It is for the same service
2. It is an objective comparison
3. It doesn't discredit the other
4. It doesn't create confusion
Percentage discounts may be offered but must not detract from the firm or the
profession
Assurance Engagement Fees
• Not calculated on a % or contingency basis
• Due to self-interest and advocacy threats
Non-Assurance Engagement Fees
• Contingent fee possible only if possible range and variability of the fee is small
• Approval by the audit committee may be needed
Setting Fees
The following needs considering:
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1. Level of expertise needed
2. Time needed
3. How important the work is to client
4. The risk of taking on the work & costs incurred
Syllabus C2c) Discuss the ethical and other professional problems, for example, lowballing,
involved
in establishing and negotiating fees for a specified assignment.
Low-Balling
This is setting the initial audit fee low in order to win the client
Ethical Issues:
• Client needs to stay to recover the initial losses so independence is impaired
• Possibly unprofessional because many smaller practices can't compete
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Syllabus C2d) Recognise and explain the matters to be considered prior to tendering for
an audit or other professional engagement and explain the information to be included in
the proposal.
Tendering
This is when an audit firm is approached by a prospective client to bid for
their audit
Audit Firm Considerations:
• How did the client get to know about them?
• Why has the firm been approached particularly?
• What is the scope of the audit?
• How risky is the audit to the firm?
• Does the firm have the necessary resources
Tender documents contents:
1. Fee and how it has been calculated
2. An assessment of the requirements of the prospective client
3. Our approach to the requirements
4. Deadlines and information needed
5. Outline of the firm and our staff
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