The case of Boris’ fantastic fee foible
Ethics
Charles Selcer, CPA, MBA | October 2021 Footnote
Editor's note: Updated September 30, 2021
Boris Tedeath, CPA has an attest function client, Plastic Fantastic, Inc. with a Dec. 31 year-end. The audit of the 2019 financial statements was completed and dated July 9, 2020. Boris billed his client $11,500 in July 2020. By Aug. 1, 2021, the client still owed Boris $600, but needs a reviewed financial statement ASAP to renew their credit line.
Q: Is Boris independent?
A. No. Independence is impaired when a covered member has unpaid fees — regardless of the amount — from an attest client for professional services provided more than one year ago.
The Professional Ethics Executive Committee (PEEC) is currently looking at a more principle-based approach to the unpaid fee issue. The amount of unpaid fees may be a factor. In Boris’ situation, $600 may be insignificant and he could do the review.
Stay tuned. This issue was discussed at the August 2021 PEEC meeting.
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