Sec. 20-281l. Contingent fees and referrals.
Sec. 20-281l. Contingent fees and referrals. (a) Except as expressly permitted
by this section, a licensee shall not: (1) Pay a fee or commission to obtain a client; or
(2) accept a fee or commission for referring a client to the products or services of a third
party.
(b) A licensee, who is not performing any of the services set forth in subsection (c)
of this section and who complies with the provisions of subsection (d) of this section,
may accept a fee or commission for referring a client to the products or services of a
third party if such referral is made in conjunction with professional services provided
to the client by such licensee making such referral. Nothing in this subsection shall be
construed to permit the solicitation or acceptance of a fee or commission solely for the
referral of a client to a third party.
(c) A licensee shall not perform services for a client for a commission and shall not
accept a commission from a client during the period that the licensee is performing for
such client any of the following services or during the period that is covered by any
historical financial statements that are involved in any of the following services: (1) An
audit or review of a financial statement; (2) a compilation of a financial statement if the
licensee expects or has reasonable cause to expect that a third party will use the financial
statement and the compilation report does not disclose a lack of independence; or (3)
an examination of prospective financial information.
(d) A licensee who is not prohibited under this section from performing services
for a fee or commission or from accepting a fee or commission and who is paid or
expects to be paid a fee or commission shall disclose such payment or expectation to
any client or other person to whom such licensee recommends or refers a product or
service to which the fee or commission relates.
(e) As used in this section, "fee" includes, but is not limited to, a commission, rebate,
preference, discount or any other consideration.
(f) This section does not prohibit payments for the purchase of all, or a material
part, of an accounting practice, or retirement payments to individuals who are or were
formerly engaged in the practice of public accountancy, or payments to the heirs or
estates of such individuals.
(g) Nothing in this section shall be construed to relieve a licensee from any requirement under federal or state law that obligates such licensee to obtain a license or authorization prior to referring a client to the products or services of a third party, including,
but not limited to, any license requirements under federal or state securities or insurance laws.
(P.A. 92-212, S. 17; P.A. 00-42, S. 1; P.A. 01-195, S. 81, 181.)
History: P.A. 00-42 designated existing provisions as Subsec. (a), adding references to fees, making technical changes,
limiting collection of fees and commissions by provisions of this section, and deleting provisions preventing collection of
commission when party likely to be influenced by status of licensee and language re purchase of accounting practice or
retirement payments, and added Subsecs. (b) to (g), inclusive, re acceptance of fee or commission for a referral, prohibiting
commission during period covered by historical financial statements, re disclosure, defining "fee", re purchase of accounting
practice or retirement payments and re federal or state law requirements, respectively; P.A. 01-195 made a technical change
in Subsec. (c), effective July 11, 2001.