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Problem 1: Rosson, a California CPA, was a partner with the California firm of Freedman & Warwick, CPA's. She worked for the firm for forty-eight years, thirty-five of them as a partner and the last six as managing partner. When Rosson retired from the firm, the other partners voted to pay her a retirement annuity of $100,000, which exceeded the $75,000 she was entitled to per the partnership agreement. It was the other partners' belief that Rosson had provided exemplary service and deserved the additional amount in her retirement annuity. Is this arrangement allowed by the California Accountancy Act?
A) Yes, it is allowed by the California Accountancy Act.B) No, this arrangement would be a commission and would not be permitted.C) Yes, it is allowed as long as the annual payment does not exceed $100,000.D) No, it is not allowed because the annual payment exceeds $50,000.
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