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The challenges presented by the rules allowing for the election of commissions and contingent fees can be classified as external and internal. External challenges require interacting with third parties outside the CPA firmand client organizations, while internal challenges involve only the firm and its clients. 

As to external challenges, some services that may result in commissions or contingent fees may require that aCPA obtain additional licenses. For example, advising clients about suitable investments may require that a CPAregister as an investment advisor with the Securities and Exchange Commission or the New Jersey Bureau of Securities. Negotiating the purchase or sale of a business that includes  real estate, on the other hand, may require that a CPA obtain a  real estate broker’s license. Some securities services may  require that new separate legal entities be created. If a firm’s  services extend beyond standard accounting and tax services,  its malpractice insurance policy also may have to be amended. 

Under the new rules, CPAs also are required to obtain a signed  notification acknowledging disclosure of receipt of a  commission, performance fee or referral fee from each entity to  which they refer a client, each time they make a referral.  Similarly, a firm’s referral arrangements with financial  institutions should be negotiated and memorialized in writing. 

Internal challenges can be just as extensive and complex. An  immediate concern will be to avoid or terminate disqualifying  services for clients from whom commissions or contingent fees  will be accepted. If a CPA currently performs an audit, review,  or compilation of a client’s financial statements and wants to  charge commissions or contingent fees to that client, then the  audit, review, and compilation services will have to be  discontinued for that client. 

If the services resulting in commissions and contingent fees are  expected to be a significant part of the firm’s practice, the firm  may need to strategically redirect its recruiting and marketing  efforts. For example, the firm may now need people with  management consulting, negotiating and marketing skills, along  with investment advisors and insurance specialists. 

Depending on the extent of the changes to be undertaken by a  firm, it also may be appropriate to consult with legal counsel,  insurance agents, securities regulators or other officials before  accepting commissions and contingent fees.