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Question - Baron and Albert are the senior partners in a mid-size audit firm. They have both acted as the lead audit partner at different times with a long-standing audit client, Industries Ltd. The new CEO of Industries has requested a meeting with Baron and Albert to discuss issues with the firm's work, including the length of time the audit team are on the Industries premises completing the audit work and the size of the audit fee charged in the past two years.
Baron and Albert have decided to negotiate with the new CEO regarding the audit fees for the coming year in the meeting. They offered the Industries a discounted audit fee if it also assigned all its tax consulting work to the firm.
Required -
1. What concerns should Baron and Albert have about the requested meeting? Explain.
2. Explain whether the offer of discount fees is appropriate? Provide comments.
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