Choice "A" is correct. Independence of the member's firm may be impaired if more than one year's fees due from a client remain unpaid. Such amounts take on some of the characteristics of a loan, and it may appear that the practitioner is providing working capital for the client.
Choice "c" is incorrect. CPAs often make recommendations for a controller's position description as a management advisory service.
Choice "d" is incorrect. Purchasing a CPA firm's practice based on a percentage of fees is a legitimate method of pricing the business. It should not be confused with a contingent fee.
Choice "b" is incorrect. Making arrangements with a financial institution to collect notes issued by a client in payment of fees due is a business arrangement. It is not a conflict of interest because there is no direct financial interest in the company.