Our profession needs to establish “ethical billing standards” that in essence would force accounting professionals to charge a statutory fee for providing assurance services. Barring professionals from underbidding jobs would reward those who conform to the standards of the profession.
The current competitive bidding process does not take into account that every job has a minimum cost to be completed in conformity with the profession’s standards.
Our costs increase every time a new accounting standard or statement of position is released, while the public’s perception of the value of our product does not change.
The accounting profession has gone to great lengths to establish standards that protect the public from fraud and misinformation. Now it’s time to establish rules that allow us to meet these standards by creating an environment in which this is an economic reality.
Ethical billing would permit us to charge fees sufficient to retain the best and the brightest. Although CPAs are uniquely qualified to provide assurance services, it is unfortunate that personal income tax preparation is more profitable.
Fees for assurance services should be easily determinable, based on the level of assurance provided and a percentage of the greater of total assets owned or revenue earned at the end of or during the period the assurance service is provided. Those accounting professionals who underbid the statutory fee would violate the profession’s code of ethics.
James A. Leone, CPA
Santa Clara, California
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