 CPA firms provide audits as well as other attestation and assurance services.  Additional services provided by CPA firms : 1. Accounting and bookkeeping.

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Presentation transcript:

 CPA firms provide audits as well as other attestation and assurance services.  Additional services provided by CPA firms : 1. Accounting and bookkeeping. 2. Tax services. 3. Management consulting services.

 Many small clients with limited accounting staff rely on CPA firms to prepare their financial statements.

 CPA firms prepare corporate and individual tax returns for both audit and non audit clients.

 Mots CPA firms provide certain services that enable their clients to operate their business more effectively.  Examples :  Improving clients accounting system.  Advice in risk management.  Information technology and E-commerce systm advice.

 The broadest guidelines available to auditors.  GAAS.  GAAS fall into three categories : 1. General standards. 2. Standards of field work. 3. Reporting standards.

A Measure of the Quality of Audit Work Generally Accepted Auditing Standards (GAAS) SAS No. 1 A. 3 General Standards Apply to every phase of audit engagement B. 3 Standards Of Field Work Apply to performance of audit work C. 4 Standards Of Reporting Apply to development of audit report

The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor. a.Specific education in auditing b. Professional experience c. Continuing education What does auditor training and proficiency involve?

In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors. Independence in fact An auditor must also be independent in appearance CPA

Due professional care is to be exercised in the performance of the audit and the preparation of the report. The Standard of the Prudent Practitioner Professional Skepticism Professional Judgment An auditor must exercise both …

The work is to be adequately planned and assistants, if any, are to be properly supervised. Yes, that is the part of the audit you will be performing.

A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed. First, we need to size up your organization’s system of internal control! CPA Audit Customer

Sufficient competent evidence does not require a fine tooth comb. Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit. Financial Statements

The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles

The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. Current Year Accounting Principles Prior Year Accounting Principles Consistent Application of Accounting Principles

Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report. Financial Statement Wording Notes to Financial Statements Disclosures Include

The report shall contain either an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. Financial Statements Balance Sheet Profit & Loss Cash Flows