Fees and Commissions

11.1. Members who undertake professional services for a client, assume the responsibility to perform such services with integrity and objectivity and in accordance with the appropriate technical standards. That responsibility is discharged by applying the professional skill and knowledge which members have acquired through training and experience. For the services rendered, the member is entitled to remuneration.

11.2. Professional fees should be a fair reflection of the value of the professional services performed for the client, taking into account:

  1. the skill and knowledge required for the type of professional services involved.
  2. The level of training and experience of the persons necessarily engaged in performing the professional services.
  3. The time necessarily occupied by each person engaged in performing the professional services.
  4. The degree of responsibility that performing those services entails.

11.3. Professional fees should normally be computed on the basis of appropriate rates per hour or per day for the time of each person engaged in performing professional services. These rates should be based on the fundamental premise that the organisation and conduct of the member and the services provided to clients are well planned, controlled and managed. They should take into account the factors set out in paragraph 11.2. It is for each member to determine the appropriate rates.

11.4. A member should not make a representation that specific professional services in current or future periods will be performed for either a stated fee, estimated fee, or fee range if it is likely at the time of the representation that such fees will be substantially increased and the prospective client is not advised of that likelihood.

11.5. When performing professional services for a client it may be necessary or expedient to charge a pre-arranged fee, in which event the member should estimate a fee taking into account the matters referred to in paragraphs 11.2 to 11.4.

11.6. It is not improper for a member to charge a client a lower fee than has previously been charged for similar services, provided the fee has been calculated in accordance with the factors referred to in paragraphs 11.2 to 11.4.

11.7. Fees should not be charged on a percentage, contingent* or similar basis in respect of audit work, reporting assignments, due diligence and similar non-audit roles incorporating professional opinions and expert witness assignments. Even for other work such methods of charging may be perceived as a threat to objectivity and should therefore only be adopted after careful consideration.

11.8. In bankruptcies, liquidations, receiverships, administrations, voluntary arrangements and similar work the remuneration may, by statute or tradition, be based on a percentage of realisations or a percentage of distributions. Consequently, it may not be possible to negotiate a fee in advance or base it on the principle in paragraph 11.7 above. In some circumstances, such as advising on a management buy-in or buy-out, the raising of venture capital, acquisition searches or sales mandates, where no professional opinion is given, it may not be appropriate to charge fees save on a contingent fee basis: to require otherwise might deprive potential clients of professional assistance, for example where the capacity of the client to pay is dependent upon the success or failure of the venture.

11.9. Where work is subject to a fee on a contingent, percentage or similar basis the capacity in which a member has worked and the basis of his remuneration should be made clear in any document prepared by the member in contemplation that a third party may rely on it.

11.10. The foregoing paragraphs relate to fees as distinct from reimbursement of expenses. Out-of-pocket expenses, in particular travelling expenses, attributable directly to the professional services performed for a particular client would normally be charged to that client in addition to the professional fees.

11.11. It is in the best interests of both the client and the member that the basis on which fees are computed and any billing arrangements are clearly defined, preferably in writing, before the commencement of the engagement to help in avoiding misunderstandings with respect to fees.

11.12. The payment or receipt of a commission by a member could impair objectivity and independence. A member should not, therefore, pay a commission to obtain a client nor should a commission be accepted for referral of a client to a third party. A member should not accept a commission for the referral of the products or services of others.

11.13. Payment and receipt of referral fees between members when no services are performed by the referring accountant are regarded as commissions for the purpose of paragraph 11.12.

11.14. A member may enter into an arrangement for the purchase of the whole or part of an accounting practice requiring payments to individuals formerly engaged in the practice or payments to their heirs or estates. Such payments are not regarded as commissions for the purpose of paragraph 11.12.

Activities Incompatible with the Practice of Accountancy

12.1. A member in public practice should not concurrently engage in any business, occupation or activity which impairs or might impair integrity, objectivity or independence, or the good reputation of the profession and therefore would be incompatible with the rendering of professional services.

12.2. The rendering of two or more types of professional services concurrently does not by itself impair integrity, objectivity or independence.

12.3. The simultaneous engagement in another business, occupation or activity unrelated to professional services which has the effect of not allowing the member properly to conduct a professional practice in accordance with the fundamental ethical principles of the accountancy profession should be regarded as inconsistent with the practice of accountancy.

Clients’ Monies

13.1. A member in public practice should not hold clients’ monies if there is reason to believe that they were obtained from, or are to be used for, illegal activities.

13.2. A member entrusted with monies belonging to others should:

  1. keep such monies separately from personal or firm monies;
  2. use such monies only for the purpose for which they are intended; and
  3. at all times, be ready to account for those monies to any persons entitled to such accounting.

13.3. A member should maintain one or more bank accounts for clients’ monies. Such bank accounts may include a general client account into which the monies of a number of clients may be paid.

13.4. An account maintained for clients’ money or as a separate account for a trust should be so named or identified.

13.5. Appropriate notice of the nature of the accounts should be given to the bank concerned. This ensures that the bank would not have the right of set off against the member’s other accounts nor would a trustee in bankruptcy be able to effect sequestration of the monies in the clients’ account.

13.6. Clients’ monies received by a member in public practice should be deposited without delay to the credit of a client account, or – if in the form of documents of title to money and documents of title which can be converted into money – be safeguarded against unauthorised use.

13.7. Monies may only be drawn from the client account on the instructions of the client.

13.8. Fees due from a client may be drawn from the client’s monies provided the client, after being notified of the amount of such fees, has agreed to such withdrawal.

13.9. Payments from a client account shall not exceed the balance standing to the credit of the client.

13.10. When it seems likely that the client’s monies remain on the client account for a significant period of time, the member should, with the concurrence of the client, place such monies in an interest bearing account within a reasonable time.

13.11. All interest earned on clients’ monies should be credited to the client account.

13.12. Members should keep such books of account as will enable them, at any time, to establish clearly their dealings with client’s monies in general and the monies of each individual client in particular. A statement of account should be provided to the client at least once per year.

Relations with Other Members in Public Practice* 1
Accepting New Assignments

14.1. The extension of operations of a business undertaking frequently results in the formation of branches or subsidiary companies at locations where an existing accountant does not practice. In these circumstances the client or existing accountant in consultation with the client may request a receiving accountant practicing at those locations to perform such professional services as necessary to complete the assignment.

14.2. Referral of business may also arise in the area of special services or special tasks. The scope of the services offered by members continues to expand and the depth of knowledge which is needed to serve the public

14.3. Members should only undertake such services which they can expect to complete with professional competence. It is essential therefore for the profession in general and in the interests of their clients that members are encouraged to obtain advice when appropriate from those who are competent to provide it.

14.4. A member without a particular skill may however be reluctant to refer a client to another member who may possess that skill, because of the fear of losing existing business to the other member. As a result, clients may be deprived of the benefit of advice which they are entitled to receive.

14.5. The wishes of the client should be paramount in the choice of professional advisers, whether or not special skills are involved. Accordingly, a member should not attempt to restrict in any way the client’s freedom of choice in obtaining special advice, and when appropriate should encourage a client to do so.

14.6. The services or advice of a member having special skills may be sought in one of the following ways:

  1. by the client
    1. after prior discussion and consultation with the member
    2. on the specific request or recommendation of the existing member; or
    3. without reference to the existing member; or
  2. by the existing member with due observance of the duty of confidentiality.

14.7. When a member is asked to provide services or advice, inquiries should be made as to whether the prospective client has an existing accountant. In cases where there is an existing accountant who will continue to provide professional services, the procedures set out in paragraphs 14.8 – 14.14 should be observed. If the appointment will result in another member being superseded, the procedures set out in paragraphs 14.15 – 14.26 should be followed.

14.8. The receiving accountant should limit the services provided to the specific assignment received by referral from the existing accountant or the client unless otherwise requested by the client. The receiving accountant also has the duty to take reasonable steps to support the existing accountant’s current relationship with the client and should not express any criticism of the professional services of the existing accountant without giving the latter an opportunity to provide all relevant information.

14.9. A receiving accountant who is asked by the client to undertake an assignment of a type which is clearly distinct from that being carried out by the existing accountant or from that initially received by referral from the existing accountant or from the client, should regard this as a separate request to provide services or advice. Before accepting any appointments of this nature, the receiving accountant should advise the client of the professional obligation to communicate with the existing accountant and should immediately do so preferably in writing, advising of the approach made by the client and the general nature of the request as well as seeking all relevant information, if any, necessary to perform the assignment.

14.10. Circumstances sometimes arise when the client insists that the existing accountant should not be informed. In this case, the receiving accountant should decide whether the client’s reasons are valid. In the absence of special circumstances a mere disinclination by the client for communication with the existing accountant would not be a satisfactory reason.

14.11. The receiving accountant should:

  1. comply with the instructions received from the existing accountant or the client to the extent that they do not conflict with relevant legal or other requirements; and
  2. ensure, insofar as it is practicable to do so, that the existing accountant is kept informed of the general nature of the professional services being performed.

14.12. When there are two or more other accountants performing professional services for the client concerned it may be appropriate to notify only the relevant accountant depending on the specific services being performed.

14.13. When appropriate the existing accountant, in addition to issuing instructions concerning referred business, should maintain contact with the receiving accountants and cooperate with them in all reasonable requests for assistance.

14.14. When the opinion of a member, other than the existing accountant, is sought on the application of accounting, auditing, reporting or other standards or principles to specific circumstances or transactions, the receiving accountant should be alert to the possibility of the opinion creating undue pressure on the judgment and objectivity of the existing accountant. An opinion given without full and proper facts can cause difficulty to the receiving accountant if the opinion is challenged or the receiving accountant is subsequently appointed by the company. Accordingly, the member should seek to minimise the risk of giving inappropriate guidance by ensuring that he or she has access to all relevant information. When there is a request for an opinion in the above circumstances there is a requirement for communication with the existing accountant. It is important that the existing accountant, with the permission of the client, provide the receiving accountant with all requested relevant information about the client. With the permission of the client, the receiving accountant should also provide a copy of the final report to the existing accountant. If the client does not agree to these communications, then the engagement should ordinarily not be performed.

Superseding Another Member in Public Practice

14.15. The proprietors of a business have an indisputable right to choose their professional advisers and to change to others should they so desire. While it is essential that the legitimate interests of the proprietors are protected, it is also important that a member who is asked to replace another member has the opportunity to ascertain if there are any professional reasons why the appointment should not be accepted. This cannot effectively be done without direct communication with the existing accountant. In the absence of a specific request, the existing accountant should not volunteer information about the client’s affairs.

14.16. Communication enables a member to ascertain whether the circumstances in which a change in appointment is proposed are such that the appointment can properly be accepted and also whether there is a wish to undertake the engagement. In addition such communication helps to preserve the harmonious relationships which should exist between all members in public practice on whom clients rely for professional advice and assistance.

14.17. The extent to which an existing member can discuss the affairs of the client with the proposed member in public practice depends on:

  1. whether the client’s permission to do so has been obtained; and/or
  2. the legal or ethical requirements relating to such disclosure.

14.18. The proposed member should treat in the strictest confidence and give due weight to any information provided by the existing member in public practice.

14.19. The information provided by the existing accountant may indicate, for example, that the ostensible reasons given by the client for the change are not in accordance with the facts. It may disclose that the proposal to make a change was made because the existing accountants stood their ground and properly carried out the duties as professional accountants despite opposition or evasion on an occasion on which important differences of principles or practice have arisen with the client.

14.20. Communication between the parties serves:

  1. To protect a member from accepting an appointment in circumstances where all the pertinent facts are not known
  2. To protect the minority proprietors of a business who may not be fully informed of the circumstances in which the change is proposed.
  3. To protect the interests of the existing accountant when the proposed change arises from, or is an attempt to interfere with, the conscientious exercise of the existing accountant’s duty to act as an independent professional.

14.21. Before accepting an appointment involving recurring professional services hitherto carried out by another member, the proposed member should:

  1. Ascertain if the prospective client has advised the existing accountant of the proposed change and has given permission, preferably in writing, to discuss the client’s affairs fully and freely with the proposed member.
  2. When satisfied with the reply received from the prospective client, request permission to communicate with the existing accountant. If such permission is refused or the permission referred to in (a) above is not given, the proposed member should, in the absence of exceptional circumstances of which there is full knowledge, and unless there is satisfaction as to the necessary facts by other means, decline the appointment.
  3. On receipt of permission, ask the existing accountant, preferably in writing:
    1. to provide information on any professional reasons which should be known before deciding whether or not to accept the appointment, if there are such matters; and
    2. to provide all the necessary details to be able to come to a decision.

14.22. The existing member, on receipt of the communication referred to in paragraph 14.21(c) should forthwith:

  1. Reply, preferably in writing, advising whether there are any professional reasons why the proposed member should not accept the appointment.
  2. If there are any such reasons or other matters which should be disclosed, ensure that the client has given permission to give details of this information to the proposed member. If permission is not granted the existing member should report that fact to the member.
  3. On receipt of permission from the client disclose all information needed by the proposed member to be able to decide whether or not to accept the appointment. It is not sufficient to state that unspecified factors exist.
  4. Discuss freely with the proposed member all matters relevant to the appointment of which the latter should be aware.

14.23. Matters referred to in paragraph 14.22(d) above would, where relevant, include the following:

  1. reasons for the change advanced by the client of which the existing member is aware are not in accordance with the facts (as understood by the latter);
  2. the proposal to displace the existing member arises in his opinion because he has carried out his duties in the face of opposition or evasion/s in which important differences of principle or practice had arisen with the client;
  3. the client, its directors, or employees may have been guilty of some unlawful act or default, or that any aspect of their conduct which is relevant to the carrying out of an audit or assignment ought, in the opinion of the existing member, to be investigated further by the appropriate authority;
  4. the existing member has unconfirmed suspicions that the client or its directors or employees have defrauded the Inland Revenue, Customs & Excise or others;
  5. the existing member has serious doubts regarding the integrity of the directors and/or senior managers of the client company;
  6. the client, its directors, or employees have deliberately withheld information required by the existing member for the performance of his duties or have limited or attempted to limit the scope of his work;
  7. the existing member proposes to bring to the attention of shareholders or creditors circumstances surrounding the proposed change of auditor.

14.24. If the receiving accountant does not receive, within a reasonable time, a reply from the existing accountant and there is no reason to believe that there are any exceptional circumstances surrounding the proposed change, the receiving accountant should endeavour to communicate with the existing accountant by some other means. If unable to obtain a satisfactory outcome in this way, the receiving accountant should send a further letter, stating that there is an assumption that there is no professional reason why the appointment should not be accepted and that there is an intention to do so.

14.25. The fact that there may be fees owing to the existing accountant is not a professional reason why another receiving accountant should not accept the appointment.

14.26. The existing accountant should promptly transfer to the receiving accountant all books and papers of the client which are or may be held after the change in appointment has been effected and should advise the client accordingly unless the existing accountant has a legal right to withhold them.

14.27. Certain organisations, either because of legislative requirements or otherwise, call for submissions or tenders, e.g. competitive bids, in relation to professional services offered by members. In reply to a public advertisement or an unsolicited request to make a submission or submit a tender, a member, if the appointment may result in the replacement of another member, state in the submission or tender that before acceptance, the opportunity to contact the other member in public practice is required so that inquiries may be made as to whether there are any professional reasons why the appointment should not be accepted. If the submission or tender is successful, the existing accountant should then be contacted.

Advertising and Solicitation

15.1. Subject to the rules which follow a member may seek publicity for his services and achievements and may advertise his services and products in any way he thinks fit.

15.2. A member may inform the public of the services he is capable of providing by means of advertising or other forms of promotion subject to the general requirement that the medium should not, in the opinion of Council, reflect adversely on the member, the Institute or the accountancy profession nor should the advertisement or promotional, in the opinion of Council:

  1. as to content or presentation, bring the Institute into disrepute or bring discredit to the member, firm or accountancy profession;
  2. discredit the services offered by others whether by claiming superiority for the member’s or firm’s own services or otherwise;
  3. be misleading, either directly or by implication;
  4. fall short of the local advertising codes notably as to legality, decency, clarity, honesty and truthfulness;

15.3. An advertisement should be clearly distinguishable as such.


15.4. If reference is made in promotional material to fees, the basis on which fees are calculated, or to hourly or other charging rates, the greatest care should be taken to ensure that such reference does not mislead as to the precise range of services and time commitment that the reference is intended to cover. Members should not make comparisons in such material between their fees and the fees of other accounting practices, whether members or not.

15.5. The danger of giving a misleading impression is particularly pronounced when constraints of space limit the amount of information which can be given. For this reason it will seldom be appropriate to include information about fees in short advertisements.

15.6. A member may offer a free consultation at which levels of fees will be discussed.

Promotional Material

15.7. Promotional material may contain any factual statement the truth of which a member is able to justify but should not make unflattering references to or unflattering comparisons with the services of others.


15.8. A member should not give or offer any commission, fee or reward to a third party, not being either his employee or public accountant in return for the introduction of a client. The purpose of this paragraph is to ensure that introductions made by third parties should only be made by persons governed by ethical standards comparable to those observed by members.

Responsibility for Promotional Activities

15.9. For the purposes of this section, promotional activities carried out in the name of a firm should be construed as promotional services carried out by the individual members of that practice, whether carried out personally or through agents.