If a CPA Charges a Contingent Fee in Connection with Providing

question 23

Multiple Choice

If a CPA charges a contingent fee in connection with providing professional services to a review client,the CPA's fee arrangement is:

• A) Permissible always
• B) Permitted only if the fee arrangement is expressed in a clear writing signed by the client
• C) Permitted only if the fee is reasonable in amount
• D) Never permissible

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Definitions:

Positive Externalities

These are benefits that a transaction or activity provides to those not involved in the transaction or activity.

Negative Externalities

Costs suffered by a third party as a result of an economic transaction that they were not directly involved in.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, typically resulting from increased production where the cost per unit of output drops as scale increases.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they are available to all and one person's use does not diminish another's.