Question
A CPA firm performs the annual audit of The Leahy Group, a private company. Leahy asks the firm to determine whether the company would qualify
A CPA firm performs the annual audit of The Leahy Group, a private company. Leahy asks the firm to determine whether the company would qualify for certain municipal tax credits and prepare the application. The firm will receive 15% of any tax credits that Leahy obtains as a result of the requested credits; if the request is denied, no fees will be due. Leahy expects city officials to perform a substantive review of its client's application. Which statement best describes why this fee arrangement would be a permissible contingent fee arrangement under the AICPA Code of Professional Conduct? The firm does not expect the contingent fee to be material on any level. The contingent fee relates to tax (nonattest) services. The contingent fee of 15% is a relatively small portion of the potential tax credit. O The firm expects the city to perform a substantive review of Leahy's application.
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