Avoiding Complaints about Fees
From CPABC’s Professional Conduct Team*
What are the rules regarding fees?
Rule 214 of the CPA Code states that CPAs
must:
• Obtain adequate information from a
client before providing a fee quote to
perform any professional service; and
• Render bills on a fair and reasonable
basis. This includes providing
appropriate explanations and details
when/if a client requests this
information.
In most cases, CPAs are free to set their fees in any manner they see fit. We’ve seen various
methods employed—from hourly billing (the most common practice) to value billing (a set fee
for a standard service) to contingent fees (sometimes acceptable). No matter what the method,
however, there are certain rules CPAs must follow when it comes to fees.
* CPABC’s ethics department is now the professional conduct department.
32 CPABC in Focus • March/April 2018
Contingent fees
Rule 215 of the CPA Code contains important
requirements regarding contingent fees (i.e.,
fees that are dependent on certain outcomes).
The rule prohibits contingent fees when the
professional service is:
• One that requires independence, per
Rule 204 (this mainly applies to
assurance work);
• A compilation engagement; or
• Preparation of an income tax return.
CPABC receives a diverse range of complaints from the public each year. Among them are
various complaints about fees from the (mostly former) clients of CPAs.
CPABC’s governing legislation does not give us the power to intervene in fee disputes between
CPAs and their clients; however, we’re interested in any complaints we receive (more on that later
in this article). Complainants sometimes expand fee disputes to include additional allegations,
and CPABC can, and does, investigate complaints about fees when it appears that a professional
may have breached the CPABC Code of Professional Conduct (CPA Code) during the billing or
collection process. Cases we’ve considered thus far include:
• A complaint that an accountant had billed for services that were initially advertised as a
“free consultation”; and
• Allegations that an accountant exhibited unprofessional behaviour when attempting to
collect fees. In one instance, we sanctioned a member who used a collection agency in an
abusive manner and who threatened to increase the billing amount if the client made a
complaint to CPABC.
Fee estimates
As noted above, before providing a fee quote
to a client, CPAs must be confident that they’ve
made sufficient enquiries about and have suf-
ficient knowledge of the prospective client’s
business to make a reasonable estimate.
The guidance to Rule 214 of the CPA Code
also warns CPAs that if they work for a fee
that is significantly lower than the fee charged
by their predecessor and/or the fees quoted
by others, they should consider the impact of
this abnormally lower fee on their perceived
independence and on the quality of their work.
CPAs should be satisfied that any fee quoted
to a client for the performance of professional
services is sufficient to ensure that they remain
independent of said client and that due care
will be applied to comply with all professional
standards when performing these services. In
other words, it is not acceptable to cut corners
in order to charge a low fee.