October 22, 2010

Monitor and evaluate the issues of the AICPA’s Professional Ethics Executive Committee (PEEC), to harmonize ethics standards of State Boards of Accountancy with other regulatory bodies, to promote the development and adoption of UAA ethics provisions uniformly among the states, and to share with state boards emerging ethics and other professional issues.

The NASBA Ethics and Strategic Professional Issues Committee studied the ethical issues associated with performing an audit, or other attest services, below cost. Initially, the Committee identified several significant ethical issues posed when a firm quotes a very low audit fee or a fee expected to result in a significant loss. Once the Committee exposed its initial ideas to comment and feedback from various State Boards of Accountancy, it became apparent that a wider scope of issues should be addressed. For instance, there may also be a significant threat to independence, integrity and objectivity when fees and profitability are too large. Both situations are addressed in the document below.

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Audit Fees and Engagement Discussion Paper

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