Which of the following best describes the effect of a contingent fee arrangement on the auditor's independence. A. The contingent fee arrangement does not impair independence if it is consistent with the registered public accountingfirm's quality control policies. B. The contingency fee arrangement impairs independence. C. The contingent fee arrangement does not impair independence unless more than half of the fee is subject to contingencies. D. The contingent fee arrangement impairs independence unless approved by the client's audit committee.

Question

Which of the following best describes the effect of a contingent fee arrangement on the auditor's independence.

A. The contingent fee arrangement does not impair independence if it is consistent with the registered public accountingfirm's quality control policies.

B. The contingency fee arrangement impairs independence.

C. The contingent fee arrangement does not impair independence unless more than half of the fee is subject to contingencies.

D. The contingent fee arrangement impairs independence unless approved by the client's audit committee.

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