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Chapter 2: The CPA Profession, Top Questions & Answers. Graded A+
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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...

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  • August 10, 2023
  • 6
  • 2023/2024
  • Exam (elaborations)
  • Questions & answers

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  • chapter 2 the cpa profession
  • top questions amp ans

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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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