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Why is contingency fees allowed for insolvency work considering it as a generally accepted practice?
How does referral fee create a self interest threat?
Thanks
I don’t quite understand your first question. Contingency fee arrangements are generally not allowed where the arrangement is contingent on something that is subject to an assurance service. So in the case of an audit engagement, a fee could not be based on reported revenue or profit, for example.
Think of a referral fee as a financial interest and hence a self-interest.
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