Chapter 2: The CPA Profession, Top Questions & Answers. Graded A+
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Course
CPA
Institution
CPA
Chapter 2: The CPA Profession, Top Questions & Answers. Graded A+
CPA firms - -Except for certain governmental organizations, the audits of all general use financial statements in the United States are done by ___ ___.
accounting, bookkeeping, tax, management consulting, risk advisory - -Ad...
Chapter 2: The CPA Profession, Top
Questions & Answers. Graded A+
CPA firms - ✔✔-Except for certain governmental organizations, the audits of all general use financial
statements in the United States are done by ___ ___.
accounting, bookkeeping, tax, management consulting, risk advisory - ✔✔-Additional services commonly
provided by CPA firms include ___ and ___ services, ___ services, ___ ___ and ___ ___ services.
independence, structure, competence, litigation. - ✔✔-Three main factors influence the organizational
structure of all firms:
1.) The need for ___ from clients.
2.) The importance of a ___ to encourage ___.
3.)The increase ___ risk faced by auditors.
Independence - ✔✔-Independence permits auditors to remain unbiased in drawing conclusions about
the financial statements.
The need for independence from clients
competence - ✔✔-Competence permits auditors to conduct audits and perform other services
efficiently and effectively.
The importance of a structure to encourage ___.
litigation risk - ✔✔-Audit firms continue to experience increases in litigation-related costs. Some
organizational structures afford a degree of protection to individual firm members.
The increased litigation risk faced by auditors
, proprietorship - ✔✔-Six organizationl structures are available to CPA firms. Except for the ___, each
structure results in an entity separate from the CPA personally, which helps promote auditor
independence.
Staff Assistant - ✔✔-0-2 Years Experience
Performs most of the detailed audit work.
Senior or in-charge auditor - ✔✔-2-5 years Experience
Coordinates and is responsible for the performance of audit procedures, including supervising and
reviewing staff work.
Manager and Senior Manager - ✔✔-5-10 years Experience
Help the in-charge plan and manage the audit, reviews the in-charge's work, and manages relations with
the client. A manager may be responsible for more than one engagement at the same time.
Partner - ✔✔-10+ years, Reviews the overall audit work and is involved in significant audit decisions. A
partner is an owner of the firm and therefore has the ultimate responsibility for conducting the audit
and serving the client
Auditing, bookkeeping, Tax, Management - ✔✔-State the four major types of services CPAs perform,
and explain each.
1. ___ and assurance services
2. Accounting and ___ services
3. ___ services
4. ___ consulting services
Proprietorship, General Partnership, General Corporation, Professional Corporation (PC), Limited
Liability Company (LLC), Limited Liability Partnership (LLP) - ✔✔-Identify the six organizational structures
available to CPA firms. Why are most CPA firms not organized as general partnerships?
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