ina DeMarc, a partner in a large CPA firm, has been approached by Bruce Jonas, a manager, with the following recommendation for incentive bonuses for staff members. Jonas recommends that the firm continue to pay each staff member a straight annual salary (which has been traditionally the only payment made) plus a bonus based on the staff member’s ability to achieve a 10% reduction in time spent on each client’s work. The firm would also pay a 5% finder’s fee for any new client the staff member brings into the firm. Jonas believes this will motivate the staff to work more efficiently, to sell the firm to new clients, and to service more clients in any given time period. This should also generate more revenue for the firm. Required How would you advise Gina DeMarc? What ethical issues should she consider

ina DeMarc, a partner in a large CPA firm, has been approached by Bruce Jonas, a manager, with the following recommendation for incentive bonuses for staff members. Jonas recommends that the firm continue to pay each staff member a straight annual salary (which has been traditionally the only payment made) plus a bonus based on the staff member’s ability to achieve a 10% reduction in time spent on each client’s work. The firm would also pay a 5% finder’s fee for any new client the staff member brings into the firm. Jonas believes this will motivate the staff to work more efficiently, to sell the firm to new clients, and to service more clients in any given time period. This should also generate more revenue for the firm. Required How would you advise Gina DeMarc? What ethical issues should she consider

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter10: Liabilities: Current, Installment Notes, And Contingencies

Section: Chapter Questions

Problem 1TIF

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