An Auditor Recommends a Local Computer Company to a Client

question 103

Multiple Choice

An auditor recommends a local computer company to a client that is trying to upgrade its computerized sales records.The client purchases $25,000 worth of equipment and sends a check to the auditor for 5 percent of the total sales.This is an example of a

• A) Commission.
• B) Contingent fee.
• C) Referral fee.
• D) Nonaudit fee.

---

Definitions:

Subcontractor

An individual or business that signs a contract to perform part or all of the obligations of another's contract.

Unsecured Credit

A type of loan or credit that is not backed by collateral, meaning the lender relies on the borrower's creditworthiness and promise to repay.

Lowest Risk

Involves choosing an option that minimizes potential hazards or losses.

Submaterialman

An individual or business that supplies materials to a subcontractor, assisting in fulfilling the subcontractor's obligations.