Can a CPA refer an audit client to a third-party service without being paid?

Can a CPA refer an audit client to a third-party service?

Yes, an unpaid introduction can usually be made, but accepting a reward for it is the problem. Under the AICPA Code's commissions and referral fees rule, a member may not accept a commission for recommending a product or service to a client when the member or firm also performs an audit, review, certain compilations or an examination of prospective financial information for that client. So with an attest client, the clean answer is to introduce without a reward, or not at all.

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

What the rule says

The AICPA Code of Professional Conduct contains the Commissions and Referral Fees Rule (ET 1.520.001). Beyond the attest bar, permitted commissions and referral fees must be disclosed to the client. Read the current text on the AICPA site, because the Code is revised.

Three layers can apply at once.

Three ways to handle an audit client

1. Introduce with no reward. Tell the client, in writing, that the firm is not being paid and will take no part. The firm should also record that it has declined any reward.
2. Decline to introduce. If the introduction would look like a recommendation by an auditor, say it is not something the firm can do.
3. Let the client find it themselves. Public information is not a referral; the client can read about the program and apply directly at sourcex.si/apply.

If you waive the reward, do so before the introduction and in writing. The program terms govern what SourceX pays; the waiver is your decision under your own rules.

Staying out of management responsibilities

Independence is not only about money. For an attest client, the firm must not take on management responsibilities. In a licensing project that means:

• You do not select which datasets or systems are offered.
• You do not set the price or negotiate or approve terms.
• You do not sign or make representations on the client's behalf.
• You do not export, review or describe confidential records for SourceX.
• You do not direct employees on the data inventory.

Your ordinary audit procedures may touch the resulting revenue, which is a further reason to keep a clear line. Raise the license early with the engagement partner and the ethics function so revenue recognition and disclosure are planned, not discovered.

Documenting the decision

• The attest status of the client for the periods involved
• The rule checked: AICPA Code and the state board rule, with dates
• Whether any reward is waived, and the date of the written waiver
• Who approved internally (ethics or risk partner)
• Confirmation that no management responsibilities were taken on
• What the client was told in writing

What to say to the client

What if the client is not an attest client?

Then the conflict rules are different: see the page on the conflicts of interest interpretation and the guidance for accountants. State rules can still differ, as with the Washington and California pages.

How rewards work

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. The reward is paid only after the buyer pays and SourceX receives its fee; an introduction, meeting or signed agreement alone does not trigger payment, and no reward is guaranteed. For an attest client, your rules may require you to decline or waive it. The reward is a share of SourceX's fee and is never deducted from the company's proceeds.

Next step

If your firm is allowed to introduce without a reward, record that decision and register as a partner once your rules are cleared; otherwise point the client to the public application route and step back.