Which of the Following Fee Arrangements Is Not a Violation

question 52

Multiple Choice

Which of the following fee arrangements is not a violation of the AICPA's Code of Professional Conduct?

• A)Basing fees as an expert witness on the amount awarded to the plaintiff, even though the CPA performs a compilation for client use
• B)Basing consulting fees on a percentage of a bond issue, even though the CPA performs a review of the client's financial statements
• C)Basing fees for a tax service on the amount of the refund that the client will receive
• D)Basing consulting fees on a percentage of a bond issue, even though the CPA performs an audit of the client's financial statements

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Definitions:

Income Fall

A decrease in the amount of money received by an individual, household, or entity, typically referring to earnings over a certain period.

Risk Aversion

A preference for guaranteed outcomes over those with uncertainty, even if the uncertain outcome might offer a higher expected return.

Utility from Insurance

The satisfaction or utility gained by individuals from reducing uncertainty and risk in their lives through the purchase of insurance contracts.

Income Increase

Income increase refers to the rise in an individual's or household's earnings, affecting their purchasing power and consumption habits.