The AICPA alternative practice structure proposal and referral fees at PE-backed firms

The short answer

It depends on your firm's structure and on the client. The AICPA's proposal on alternative practice structures (APS) concerns how ethics and independence rules apply where private equity investors own or influence the services side of a CPA practice. Whatever its final text, the question an advisory partner must answer before joining any referral program, including SourceX's, stays the same: does any part of the network perform attest work for the client you want to introduce, and what do the AICPA Code, your state board and your firm's policy say about commissions and referral fees for that client?

The AICPA Code's commissions and referral fees rule is the anchor. Under ET 1.520, a member in public practice may not accept a commission for recommending a product or service to a client when the member or the firm also performs an audit, a review, certain compilations or an examination of prospective financial information for that client, and permitted commissions and referral fees must be disclosed to the client. A structure change can alter who counts as the firm and whose clients count as attest clients, which is why the proposal matters to referral decisions.

What an alternative practice structure is

In general terms, an APS is a structure in which a CPA-owned firm keeps the attest practice, while a separate company, often backed by private equity, owns the tax, advisory and consulting business. The attest firm typically leases staff, offices and systems from that services company, and many partners work in both.

For referral purposes, that split creates three questions:

• Which entity employs you and would receive any referral reward?
• Which entity serves the client, and does the attest firm, or any network firm, audit, review or compile its statements?
• Whose policy governs outside compensation: the attest firm's, the services company's or the investor's?

What the proposal is about

The AICPA has exposed proposed changes to its ethics guidance for alternative practice structures that involve private equity investment. The proposal is reported to focus on how an investor's control of, or significant influence over, the services company affects independence, and how far network-firm concepts reach across the structure. Read the exposure draft itself and your state society's summary for the exact wording, comment deadlines and status; final rules can differ from a proposal.

Until final text is adopted and your firm has mapped it, treat the current Code, your state's rules and your firm's independence system as the operative tests.

What else the rules say

Three more layers sit on top of ET 1.520.

• Contingent fees. The same Code addresses contingent fees in ET 1.510, which restricts fees contingent on a result for clients of the firm that receive audit, review, certain compilation or prospective financial information examination services. Because a referral reward depends on a deal closing, ask your ethics counsel whether this rule is relevant to your situation.
• State rules. States can adopt the AICPA provisions or go further. Kansas, for example, requires CPAs and firms to comply with the AICPA provisions on commissions and referral fees, including interpretations, under K.A.R. 74-5-103. Florida regulates commissions and referral fees by statute in section 473.3205, including written disclosure of commissions; the linked page is the 2017 text, so check the current statute. The New Jersey Society of CPAs' guide to commissions and contingent fees shows how a state's rules can be stricter than the Code.
• SEC independence. If the firm or a network firm audits an SEC registrant, SEC auditor-independence rules are a separate regime from the AICPA Code, as SEC staff correspondence with the AICPA ethics committee on contingent fees reflects. Check those rules as well.

How it applies in common partner situations

Lower middle market companies often provide reviewed or audited statements to their lenders, so check attest relationships even for clients you know only through advisory work.

How the SourceX reward is structured

Knowing the mechanics helps your ethics counsel classify it. Partners earn 25% of the eligible platform fees SourceX actually collects from the referred company's licensing deals, capped at $100,000 per referred company, and the reward is payable only after the buyer pays and SourceX receives its fee; no reward is guaranteed.

Because it comes out of SourceX's fee, the reward never reduces what the client company is paid. Partners only make introductions and give basic fit information; they never export, upload or describe confidential client records. Companies introduced must be US businesses with 50+ full-time employees at peak (contractors excluded), several years of documented operations, rights to license their data and an authorized sponsor. The full terms are in the program terms.

Disclosure and consent good practice

• Run the client through the firm's independence system, covering every network entity, before any conversation about licensing.
• Get ethics or compliance sign-off in writing for the specific client.
• Tell the client in writing, before the introduction, that you may be paid a share of SourceX's fee if the company completes a licensing deal and SourceX collects, and that this does not reduce the client's proceeds.
• Obtain the client's consent to the introduction, and share only basic fit information.
• Record the disclosure and consent in the engagement file.
• Revisit the analysis whenever services change, for example when a new review engagement starts.

Questions to ask your ethics counsel or state society

1. Under the current Code and the final APS rules, which entities in our structure are network firms or affiliates?
2. Does any network firm perform attest work for this client, now or in a period the rule covers?
3. Does our state adopt the AICPA provisions by reference, add its own statute, or apply stricter rules?
4. How do we classify a reward paid by a third party after a licensing deal closes: commission, referral fee or something else?
5. Which entity would receive the reward, and whose policy approves it?
6. What must our written disclosure to the client say, and when must the client receive it?

This is general information, not legal, tax or financial advice. Confirm with your own counsel, tax adviser or professional body before acting.

If the rules rule out a reward

The client does not need you to receive anything in order to explore licensing. It can apply directly at sourcex.si/apply, and the who qualifies page and company fit checker let it test fit first. Advisory partners at PE-backed firms often meet these clients through finance work; the accountants partner page and CFO priorities 2026 cover where the topic comes up.

Next step

Take the six questions above to your ethics counsel before registering. If the analysis clears you for a specific client, register as a partner and make the introduction with written disclosure.