What is Commissions and referral fees?
In short
A member in public practice may not accept a commission for recommending a product or service to a client while performing attest services for that client. For other clients, commissions are allowed if disclosed.
Key takeaways
- The restriction covers the period of the attest engagement and the historical statements it covers.
- Referral fees for recommending or referring a service of another accountant must be disclosed to the client.
- Contingent fees follow a separate rule.
Where it's tested
AUD: Professional Ethics & Independence — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
An audit senior on the engagement team owns 10 shares of the audit client's common stock, worth approximately $300. What is the effect on independence?