In the context of accounting, with whom may an agent legally share commissions?

• A. Only with other agents who are licensed and affiliated with the same brokerage
• B. With unlicensed individuals who referred the client
• C. With any family member regardless of their licensing status
• D. With any client involved in the transaction

Answer: (A)

Verified step by step guidance

1. Understand the concept of commission sharing in accounting and legal regulations surrounding it. Commissions are typically earned by agents for facilitating transactions, and sharing them is subject to strict legal and professional guidelines.
2. Review the licensing requirements for agents. In most jurisdictions, agents can only share commissions with other licensed agents who are affiliated with the same brokerage. This ensures compliance with legal and ethical standards.
3. Consider the implications of sharing commissions with unlicensed individuals. Sharing commissions with unlicensed individuals who referred the client is generally prohibited, as it violates licensing laws and professional ethics.
4. Evaluate the option of sharing commissions with family members. Family members who are not licensed agents cannot legally receive commissions, regardless of their relationship to the agent.
5. Analyze the possibility of sharing commissions with clients involved in the transaction. Sharing commissions with clients is typically not allowed, as it may create conflicts of interest and violate professional standards.