I don’t understand this Accounting question and need help to study.
**give detailed answer not just yes or no**
I do not believe CPA firms have a responsibility to perform audits of charitable organizations for reduced or lower audit fees. CPA firms are for profit businesses. The price they charge to conduct an audit should be the same for regular or charitable organizations. Audit fees should only be adjusted so that they reflect the time put into an audit being conducted or the scope and size of the audit. It is a firm specific to decision to decide whether they are willing to reduce fees for charitable organizations, but it is not a responsibility.
If firms perform audits for not-for-profits at reduced fees I believe it will have a negative impact on the quality and effort put into the audit. Auditors may feel that since the job is not as profitable, they may not have to put forth as much effort. They may not be as vigilant or skip over certain procedures in order to get the job done quicker. They might not put as much effort into verifying information and there might be a lot of corners cut. They will do the bare minimum to make sure the audit is complete. I believe that audits done at reduced prices will lead to higher occurrences of fraud.
There are a few advantages that might be gained from reducing fees for charitable organizations. It would be good PR for a company. Consumers tend to have a higher view of organizations that are philanthropic. It could be a boost to a company’s reputation. Also, since audits are not mandatory for non-profits, there would be a lot less competition in the market. This would be a great area to tap into in order to generate more revenue. Even with reduced fees, a profit would still be made because you would have more clients that you typically would not have had before.