Our fees are based on a matrix of the following six variables : Time spent on the engagement Complexity of the engagement Level of seniority of the staff involved Client’s level of computerization Volume of transactions to be audited Specificity of the engagement. Time spent on the engagement With many professional services, the basic element in determining the amounts billable is the amount of time expended on the job. Auditing is no different. To minimize the amount expended and consequently pass the savings to clients, we allocate staff with relevant experience to particular Jobs. We also allocate a full-time manager and partner to assist in technical issues and come up with solutions as soon as problems arise. Complexity of the engagement When confronted with a complex task, we tap from the repository expertise within our firm and where necessary ask our specialized partners in specific sectors to join in to help us find solutions. These partners carry out the task as if the final responsibility rested on them. Level of seniority of the staff involved Because of the varied sizes of our clients, we allocate assignments according to the needs of the clients without compromising on our quality. Bookkeeping assignments are allocated to middle-level staff, while specialized engagements such as taxation and audit assurances are assigned to senior managers. Each staff category has a different billing rate, hence the different billings to clients. Client’s level of computerization The art of record keeping has evolved from the year 1211, when the first known attempt to write books of accounts was made by an Italian banker in Florence. Currently, organizations have several methods of recording transactions. While many organizations use polished accounting softwares, there are some which either write the books manually, use excel spreadsheets or just file the payment slips and receipts. Each of these methods dictates the volume of work that has to be done. We have learnt that, when engaged to carry out the audit of a company whose records are properly computerized, our fees tend to be lower than when confronted with manually recorded books of accounts. Volume of transaction to be audited To be able to form an opinion, audit procedures dictate the making of a satisfactory selection of representative samples to be tested. Where the client has huge volumes of transactions, the percentage of transactions to be tested will therefore be significantly large. Because of the difference in the bulk of work to be done, arising from different sample sizes, our fees differ from one client to the other, more so if the internal controls of the organization are weak. Specificity of the engagement Particular engagements will be billed using the same matrix, but tax consultancy is billed at a flat- rate retainer fee for the following services: - Computation and filing of installment taxes; - Computation and filing of final tax returns; - Advice on tax matters arising during the year or requiring updates. However, other specialized tax matters such as applying for tax exemptions, in-depth tax audits, etc., will be billed separately and at different rates based on the above billing matrix.
Posted on: Thu, 07 Nov 2013 07:00:11 +0000
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