The client and our firm have agreed on an initial estimated audit fee of $21,000 (see the

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The client and our firm have agreed on an initial estimated audit fee of $21,000 (see the engagement letter). However, the estimated total cost of performing this year's audit is $27,510 (see the fee budget on workpaper 6-5). Discuss possible reasons why a CPA firm might charge a new client an audit fee that is lower than the estimated first-year costs of performing the audit.

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Integrated Audit Practice Case

ISBN: 9780912503356

5th Edition

Authors: David S. Kerr, Randal J. Elder, Alvin A. Arens

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