The CPA Profession Chapter 2 Learning Objective 1

Transcript:The CPA Profession Chapter 2 Learning Objective 1:
The CPA Profession Chapter 2 Learning Objective 1 Describe the nature of CPA firms, what they do, and their structure. Certified Public Accounting Firms The legal right to perform audits is granted to CPA firms by regulation of each state. CPA firms also provide many other services to their clients, such as tax and consulting services. Certified Public Accounting Firms The five largest CPA firms in the United States are called the “Big Five” international CPA firms. Three CPA firms in the United States are called national firms because they have offices in most major cities. Certified Public Accounting Firms There are only approximately 100 regional and large local CPA firms with professional staffs of more than 50 people. More than 95% of all CPA firms have fewer than 25 professionals in a single-office firm. Management Consulting Services Tax Services Accounting and Bookkeeping Services Activities of CPA Firms Structure of CPA Firms Three main factors influence the organizational structure of all firms: 1. The need for independence from clients 2. The importance of a structure to encourage competence 3. The increased litigation risk faced by auditors Organizational Structure Proprietorship General Partnership General Corporation Professional Corporation Limited Liability Company Limited Liability Partnership Hierarchy of a Typical CPA Firm Staff Level Staff Assistant Senior Auditor Experience Typical Responsibilities 0-2 years Performs most of the detailed audit work 2-5 years Responsible for the audit field work, including supervising staff work Hierarchy of a Typical CPA Firm Staff Level Manager Partner Experience Typical Responsibilities 5-10 years Helps the plan, manages the audit, reviews work, and works with the client 10+ years Reviews audit work and makes significant audit decision Learning Objective 2 Discuss how e-commerce and the Internet affect CPA firm operations. E-Commerce and CPA Firm Operations CPA firms are using the Internet to market their services. They also use the Internet to connect their global professional staff. Sender’s mail server Receiver’s mail server Learning Objective 3 Describe the key functions performed by the AICPA. The AICPA sets professional requirements for CPAs, conducts research, and publishes materials on many different subjects related to accounting, auditing, attestation and assurance services, management consulting services, and taxes. AICPA Vision for the Future The AICPA has established the CPA Vision Project to provide a core purpose and a vision for the CPA profession in the year 2011 and beyond. The core purpose of the CPA Vision Project is