Harbor Ridge CPAs is about to open on 07/01/2026 with a cap table that looks workable in a normal professional services business. Two CPA owners hold 55% of the voting rights and profits, and two non-CPA owners hold the remaining 45%. The firm also wants to offer a mix of tax, client accounting services, and SSAE agreed-upon procedures, then hit $600,000 of revenue in year 1 across about 120 clients. Before pricing or hiring matters, one decision controls whether the firm can hold itself out as a CPA firm and deliver SSAE work without triggering an ethics or licensing problem. We need an operating model that keeps CPA control real, keeps attest responsibility with a CPA, and sets guardrails for paid leads and referral money under the AICPA Code families that apply in public practice.
The practical choices that create most early ethics issues are not abstract. They are ownership and governance terms, which services we advertise as part of the firm, and how we get work through lead sources, referral fees, and commissions. Those choices map directly to the AICPA Code families we will use here. ET 1.800 covers form of organization and name, ET 1.200 covers independence for attest, ET 1.500 covers fees and other types of remuneration, and ET 1.100 frames integrity and objectivity that gets pressured when a revenue source starts influencing who we serve and how we serve them. Start by linking each firm decision to the code family that answers it:
If Harbor Ridge signs an SSAE agreed-upon procedures engagement, the firm is no longer just selling tax and bookkeeping. It is issuing an attest report that third parties may rely on, and the CPA designation in the firm name signals that regulated work is being performed inside a permitted firm structure. That is where form of organization stops being a branding choice and becomes a compliance constraint because ownership and voting control must sit with CPAs, not just on paper but in how the firm is governed day to day.
The governing rule for an AICPA member in public practice is that a firm performing SSAE engagements or holding itself out as a CPA firm must have certain characteristics under the Form of Organization and Name Rule in ET 1.800.001. One of those characteristics is a majority of ownership in terms of financial interests and voting rights belonging to CPAs, and any non-CPA owner must be actively engaged as a member of the firm or its affiliates. This is why a cap table that meets 55% CPA voting and profit generally passes the majority test, while the same percentages paired with passive non-CPA investors fails even if the CPAs can outvote them.
Harbor Ridge’s 55% CPA ownership and voting clears the majority threshold in ET 1.800.001, so the immediate compliance question shifts from percentages to participation and responsibility. The non-CPA owners cannot be outside investors, and they cannot assume ultimate responsibility for SSAE AUP engagements. The firm needs to document that each non-CPA owner is actively engaged in the business, such as operations, marketing, technology, or client service, and that a CPA retains ultimate responsibility for the regulated services the firm performs. If the ownership mix ever changes, the operating agreement also needs a mechanism to restore compliance if an owner stops being actively engaged.
Practice tip Treat “active participation” as an operating requirement, not a biography. It should be visible in role descriptions, authority limits, and performance expectations.
The revenue plan includes a paid lead arrangement of $15,000 per year and a proposal to accept $8,000 of referral fees from a payroll provider. Before we decide whether any of that is permitted, we have to decide what the firm is to the client in each relationship. If Harbor Ridge performs an SSAE AUP engagement for a client, the firm is providing an attest service, and independence requirements attach to that attest relationship. If Harbor Ridge only provides tax or CAS for the client, independence is usually not the binding constraint, but integrity and objectivity still are because money tied to steering clients can bias recommendations.
ET 1.520.001 is the AICPA rule that governs commissions and referral fees for members in public practice. The key boundary for Harbor Ridge is that commissions are prohibited for an attest client, and also prohibited in certain compilation circumstances. Referral fees can be received or paid, but they carry an expectation of disclosure to the client at the time of the referral. That timing matters because a disclosure after the fact does not let the client evaluate whether the referral is being made because it is best for the client or because it pays the firm.
The $8,000 referral fee can be permissible under ET 1.520.001 if it is disclosed at the time of the referral and if the related client is not an attest client of Harbor Ridge when the fee arrangement would impair independence. A payroll-provider commission is treated differently because it is compensation triggered by selling or recommending a product or service. For any client where Harbor Ridge performs an SSAE AUP engagement, receiving a commission connected to that client would be prohibited under ET 1.520.001 because it creates a direct financial interest in steering that attest client. The decision point is not whether the commission feels small or common in the market. It is whether the client is an attest client of the firm and whether the arrangement is disclosed when required. Decide how each payment is treated under the rule based on the facts given: