Question

Avoiding commission and referral fees provides auditors with greater independence and objectivity, both in fact and in appearance. In those circumstances where a CPA can accept a commission or referral fee, being open and honest with the exhibits integrity and allows the client to make their own judgments about any conflicts that may affect objectivity.

Answer 1

In accounting, the avoidance of commission and referral fees is crucial for maintaining auditor independence and objectivity, and when these fees are accepted, transparency is key for upholding integrity.

Step-by-step explanation:

Auditor independence and objectivity are essential principles in the field of accounting. Avoiding commission and referral fees is seen as a means to provide auditors with greater independence and objectivity, critical for ensuring the accuracy and reliability of financial reporting.

When CPAs find themselves in a situation where accepting a commission or referral fee is permissible, maintaining transparency by being open and honest upholds integrity. This transparency allows clients to adequately assess any potential conflicts of interest that might affect the auditor's objectivity.