Factors influencing the audit fee, part three

Factors influencing the audit fee, part three

The audit fee is the third part, which we will discuss in several parts.

If we know that the audit report actually creates risk and we have to estimate and demand the price of this risk creation.

Then we will have to estimate the risk dimensions of the numerous buyers of the audit report, instead of taking refuge in the auditor classification fee table.

In such a case, without a doubt, the fee for auditing services is not 70% or 170%, which may increase several times depending on the risk of certain buyers.

Perhaps familiarity with some key economic concepts can help determine the audit fee.

In the definition of the commodity, it is said that the commodity is a foreign object.

which, first of all, fulfills one of the human needs through its properties,

And secondly, the purpose of its production is not the direct consumption of the producer, but exchange with another product.

And this second characteristic of the commodity, which distinguishes it from the products of other forms of human production activities,

Precisely in the context of “auditing” accreditation service relations, it is also very important.

Commodity production is a direct result of social division of labor.

That is, without the division of social labor, there will be no product production.

And of course, it is very important to note that the opposite is not true.

In other words, it is possible to witness the social division of labor in a society without necessarily having commodity relations in that society.

What are the indicators of the difference between goods and services?

An overview of the goods index shows that all goods have the ability to accumulate, be tangible and can be stored.

In addition, goods can be produced and used at the same time, which is not considered in auditing services.

It means that an audit institute cannot prepare an audit report from an unknown bank.

“even if its information data has been accessed”

And keep it ready so that if the bank wants to sell the report to him?!

According to the principle that there are differences between goods and services,

It is reasonable, acceptable and logical to a large extent.

It means that like producing bicycles or cars with audit services.

“Risk production” is not of the same category.

Therefore, the same tool should not be used in their pricing.

The characteristics listed above are the fundamental characteristics of the difference between audit work and the production of any other product.

Because, for example, goldsmiths and jewelers produce and display their products and sell them without knowing who will buy them.

But can auditors do the same?