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O'CONNOR REAL ESTATE EVENTS |
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- Office Forecast Luncheon
September 22, 11:30 a.m. - 1:00 p.m.
Location:
Courtyard on St. James, 1885 St. James Place, Houston
Register Now!
- Apartment Forecast Luncheon
October 20, 11:30 a.m. - 1:00 p.m.
Location:
Courtyard on St. James, 1885 St. James Place, Houston
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- Industrial Forecast Breakfast
November 17, 7:30 a.m. - 9:00 a.m.
Location:
Courtyard on St. James, 1885 St. James Place, Houston
Register Now!
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California to Tighten Regulation On CPAs Receiving Referral FeesAugust 15, 2007
California to Tighten Regulation On CPAs Receiving Referral Fees
The State of California has the most stringent rules preventing CPAs from accepting referral fees. While this rule has been around for some time, it appears that it will now begin to be enforced.
The California Board of Accountancy's Commission and Contingency Fees regulation states "A licensee may accept commissions in limited situations. A licensee may accept commission-based compensation for defined services - as long as the fees are disclosed in writing and various prohibited services are not performed.
However, a licensee still is prohibited from accepting any fee or commission solely for referral of a client to a third party."
California disclosures must be in detailed written form and
- Be in writing and be clear and conspicuous
- Be signed by the recipient of the product or service
- State the amount of the commission or the basis on which it is computed
- Identify the source of the payment
- Identify the relationship between the source and the person receiving the payment
However, the AICPA guidelines are less stringent, requiring only disclosure. The AICPA recommendations for disclosure include:
The CPA should provide the client with a notification statement at the time of making the final product recommendation.
The statement should include information about the following items:
- The nature of the relationship between the CPA and the investment company whose financial product is being recommended,
- The nature of the compensation arrangements,
- The types of financial products investigated and the form of compensation for each one, including the product that is being recommended,
- The amount of compensation to the CPA for each product that is included in item 3 above, and
- The reason for selecting the product that is being recommended to the client. The recommended disclosures should assist the client in evaluating whether a conflict exists between the interest of the client and the CPA.
For more information, visit the California Board of Accountancy's Web site or the CPA Journal.
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