The CPA Profession, Top Questions and answers. 100% Accurate. VERIFIED.

The CPA Profession, Top Questions and answers. 100% Accurate. VERIFIED. State the four major types of services CPAs perform, and explain each. - -1. Accounting and bookkeeping services, which are the major source of revenue for most large CPA firms. 2. Tax services, especially are more common to many small firms than accounting and bookkeeping service. 3. Management consulting services. Audit firms are not restricted from providing consulting to private companies and public companies that are not audit clients. What major characteristics of the organization and conduct of CPA firms permit them to fulfill their social function competently and independently? - -1. The need for independence from clients. 2. The importance of a structure to encourage competence, which permits auditors to conduct audits and perform other services efficiently and effectively. 3. The increased litigation risk faced by auditors. What is the role of the Public Company Accounting Oversight Board? - -The PCAOB, appointed and overseen by the SEC: 1. Provides oversight for auditors of public companies. 2. Establishes auditing and quality control standards for public company audits. 3. Performs inspections of the quality controls at audit firms performing audits. 4. Registers accounting firms to assess their compliance with the rules of the PCAOB's and the SEC's, professional standards and quality control policies. 5. Requires annual inspections of audit firms that audit more than 100 issuers and inspections at least once every three years. Describe the role of the SEC in society and discuss its relationship with and influence on the practice of auditing. - -The SEC, an agency of the federal government, assists in providing investors with reliable information upon which to make investment decision: 1. The Securities Act of 1933 requires most companies planning issue new securities to the public to submit a registration statement to the SEC for approval. 2. The Securities Act of 1934 provides additional protection by requiring public companies and others to file detailed annual reports with the commission. 3. The securities require financial statements to be accompanied by the opinion of an independent public accountant, as part of a registration statement and subsequent reports. What roles are played by the American Institute of Certified Public Accountants for its members? - -The AICPA, whose membership is voluntarily restricted to CPAs, but not all are practicing independent auditors: 1. Is the largest professional association for CPAS in the US. 2. Sets professional requirements for CPA, conducts research, and publishes materials related to accounting, auditing, attestation, assurance services, consulting, and tax. 3. Organize national advertising campaigns. Four major areas in which the AICPA has authority to set standards and make rules: 1. Auditing standards 2. Compilation and review standards 3. Other attestation standards 4. Code of Professional Conduct. What are the purposes the AICPA Statement on Standards for Attestation Engagements? - -To priv Who I responsible or establishing auditing standards for audits of U.S. public companies? Who is responsible for establishing auditing standards for U.S. private companies? Explain. - -... Distinguish between generally accepted auditing standards and generally accepted accounting principles, and give two examples of each. - -... The Responsibilities principle requires that auditors be responsible for having appropriate competence and capabilities to perform the audit. What are the various ways in which auditors can fulfill this principle? - -...