There are still considerable restrictions on
advertising. Any advertisement should not:
advertising. Any advertisement should not:
·
Bring
into disrepute themselves, any member of the professional body, the firm or the
accountancy profession generally;
Bring
into disrepute themselves, any member of the professional body, the firm or the
accountancy profession generally;
·
Discredit
the services of others by for example claiming superiority;
Discredit
the services of others by for example claiming superiority;
·
Contain
comparisons with other members or firms;
Contain
comparisons with other members or firms;
·
Be
misleading, either directly or by implication;
Be
misleading, either directly or by implication;
·
Fall
short of the advertising standards authority as to legality, decency, honesty
and truthfulness.
Fall
short of the advertising standards authority as to legality, decency, honesty
and truthfulness.
Adverts may refer to the basis on which fees are
calculated, but this is often best avoided.
calculated, but this is often best avoided.
Firms must be careful about comparisons with other
audit firms to avoid being misleading. Under certain circumstances they may
offer free consultations and possibly discounts, but this has to be handled
very carefully. Audits may not be carried out free of charge or at a discount!
audit firms to avoid being misleading. Under certain circumstances they may
offer free consultations and possibly discounts, but this has to be handled
very carefully. Audits may not be carried out free of charge or at a discount!
None of this means that accountants’ advertisements
need be dull or unimaginative; many firms have put out exciting adverts but
whether they are also ‘attractive’ is a different matter.
need be dull or unimaginative; many firms have put out exciting adverts but
whether they are also ‘attractive’ is a different matter.
Enterprises in all sectors of the economy have
sought to reduce costs in recent years. A major cost is the audit free and
other fees paid to the auditor for other work. Many enterprises have asked
several firms to tender for the audit and other work. This has led to the practice
of ‘lowballing’ or tendering low to get the work, with the intention to gain
extra income by chairing the client for additional services.
sought to reduce costs in recent years. A major cost is the audit free and
other fees paid to the auditor for other work. Many enterprises have asked
several firms to tender for the audit and other work. This has led to the practice
of ‘lowballing’ or tendering low to get the work, with the intention to gain
extra income by chairing the client for additional services.
The practiceof ‘lowballing’ is, generally,
prohibited by the regulatory bodies and auditors must be prepared to justify
the fees charged to the client in terms of wok done, hours spent and rates at
which staff are charged.
prohibited by the regulatory bodies and auditors must be prepared to justify
the fees charged to the client in terms of wok done, hours spent and rates at
which staff are charged.
There is no evidence that ‘lowballing’ compromises
audit quality as the regulations and the fear of litigation generally ensures
that auditors try and deliver a quality service to their client irrespective of
the size of the fee charged.
audit quality as the regulations and the fear of litigation generally ensures
that auditors try and deliver a quality service to their client irrespective of
the size of the fee charged.
There is a general prohibition on any publicity
which would bring accountants, their professional body or the profession, into
disrepute.
which would bring accountants, their professional body or the profession, into
disrepute.
Accountants may advertise for work and engage in
other forms of publicity, for example, by posters or hoardings or no motor
vehicles, no sportswear or by sports sponsorship providing that the advertising
itself is considered concomitant with the dignity of the profession.
Accountants may not make any unflattering reverences to, or comparisons, with
competitors or other professional service providers.
other forms of publicity, for example, by posters or hoardings or no motor
vehicles, no sportswear or by sports sponsorship providing that the advertising
itself is considered concomitant with the dignity of the profession.
Accountants may not make any unflattering reverences to, or comparisons, with
competitors or other professional service providers.
Accountants may pay an introductory commission, fee
or reward to a third party for introducing clients; however, it is advisable
that such payments are declared to the client.
or reward to a third party for introducing clients; however, it is advisable
that such payments are declared to the client.
