Question
Becker & Smith, CPAs, and its client, Troper Lighting, are discussing a possible advisory engagement in which the firm would review Troper's accounts receivable system
Becker & Smith, CPAs, and its client, Troper Lighting, are discussing a possible advisory engagement in which the firm would review Troper's accounts receivable system and recommend changes that would streamline the company's collection process. Troper will pay Becker & Smith a fee based on improved performance in accounts receivable collections. Would this contingent fee arrangement raise any ethical concerns under the profession's rules?
a) Yes, but only if Becker & Smith was performing other services for Troper.
b) Yes, if Becker & Smith also performed a review engagement for Troper.
c) No, but only if Troper is a publicly traded company subject to SEC and PCAOB rules.
d) No, provided Becker & Smith documents the arrangement in the engagement letter.
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