[bigbuk]

Can someone help clarify this topic for me? I have seen questions regarding the PCAOB does not allow for contingent fee’s at all including tax work, but then sometimes I see if pre approved by the Audit Committee than it is acceptable. I guess i get confused by non-audit services such as consulting when that impairs independence and when it doesn’t. I understand that if your in an authoritative position it automatically impairs independence, I just want to have it sound for the test tomorrow! thanks

[FAR_WARS]

Contingent Fees are usually not allowed, but there are exceptions.

Exceptions include:
*compilations (creates a lack of independence which must be disclosed)
*representing a client in an examination of a tax return by the IRS.

good luck tomorrow!

FAR- 80
BEC- 75
AUD- 78
REG- ?

[bigbuk]

appreciate it @FAR_WARS, what about nonaudit services that would or would not impair independence?

[FAR_WARS]

Summary of AICPA ET 101

Impairs Independence:
*direct financial interest or material indirect financial interest.
*Unpaid Client audit fees over 1 yr old
* CPA is employee of client or CPA's spouse has a mgmt position w client.
*CPA makes hiring decisions for a client.
*Certain Litigation

Does Not Impair Independence:
*CPA recommends a job description, screens job candidates, or advises the client on hiring decisions.
*CPA has fully insured checking account with client.
*CPA has fully collateralized auto loan with client.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Author]

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