Connecticut § 20-281l - l . Certain recommendations and referrals for commission prohibited. Disclosure of commission.

§ 20-281l. l . Certain recommendations and referrals for commission prohibited. Disclosure of commission.

Sec. 20-281l. Certain recommendations and referrals for commission prohibited. Disclosure of commission. (a) A licensee shall not recommend or refer any product or service to a client for a commission and shall not accept a commission from a client during the period that the licensee is performing for such client any of the following services or during the period that is covered by any historical financial statements that are involved in any of the following services: (1) An audit or review of a financial statement; (2) a compilation of a financial statement if the licensee expects or might reasonably expect that a third party will use the financial statement and the licensee's compilation report does not disclose a lack of independence; or (3) an examination of prospective financial information.

(b) A licensee who is not prohibited under this section from performing services for a commission or from accepting a commission and who is paid or expects to be paid a commission shall disclose such payment or expectation to any person or entity to whom such licensee recommends or refers a product or service to which the commission relates.

(P.A. 92-212, S. 17; P.A. 00-42, S. 1; P.A. 01-195, S. 81, 181; P.A. 21-37, S. 35.)

History: P.A. 00-42 designated existing provisions as Subsec. (a), adding references to fees, making technical changes, limiting collection of fees and commissions by provisions of this section, and deleting provisions preventing collection of commission when party likely to be influenced by status of licensee and language re purchase of accounting practice or retirement payments, and added Subsecs. (b) to (g), inclusive, re acceptance of fee or commission for a referral, prohibiting commission during period covered by historical financial statements, re disclosure, defining “fee”, re purchase of accounting practice or retirement payments and re federal or state law requirements, respectively; P.A. 01-195 made a technical change in Subsec. (c), effective July 11, 2001; P.A. 21-37 deleted former Subsecs. (a) and (b) and (e) to (g) and redesignated existing Subsecs. (c) and (d) as Subsecs. (a) and (b), amended redesignated Subsec. (a) to change prohibition from performing services for a commission to prohibition recommending or referring product or service for commission and changed “has reasonable cause to” to “might reasonably expect” and amended redesignated Subsec. (b) to delete references to fee and change “client or other person” to “person or entity”.