...Vincent Mokwenye ACCA 545- Financial Reporting Monday December 18, 2012 Memorandum- CPA Report MEMORANDUM Date: December10, 2012 To: Libby Grimes Re: CPA Report This memo is in response to the request for information from the CPA firm examining our subsidiary. The memo addresses information regarding the methodology used to determine deferred taxes, the various procedures used for reporting accounting changes and error corrections, and the rationale for establishing the subsidiary as a corporation. In addition it provides information on the professional responsibilities of Certified Public Accountants (CPA’s). Finally, a distinction is made between a financial audit and a financial review. The Methodology used to Determine Deferred Taxes It is common knowledge that companies report different amounts of income on their income statements and tax returns respectively. This difference is caused by the fact that taxable income is determined on the cash basis of accounting using the internal revenue service (IRS) code; whereas the pre-tax income reported on the income statement is determined on the accrual basis of accounting using generally accepted accounting principle (GAAP). This difference in accounting basis causes the differences in the amounts reported on the income statements and the tax returns. This temporary difference is responsible for deferred tax liability or asset that is recorded on a company’s balance sheet. Therefore, where the amount of taxes payable...
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...Republic Act No. 9298 The Philippine Accountancy Act of 2004 I. Objectives: a. The standardization and regulation of accounting education; b. The examination for registration of certified public accountants; and, c. The supervision, control, and regulation of the practice of accountancy in the Philippines. II. Scope of Practice a. Practice of Public Accountancy – b. Practice in Commerce and Industry – c. Practice in Education/Academe – d. Practice in Government – The Professional Regulatory Board of Accountancy III. The Professional Regulatory Board of Accountancy – the Body authorized by law to promulgate rules and regulations affecting the practice of accountancy profession in the Philippines. –it is under the supervision and control of the Professional Regulation Commission. Compositions and Term of Office: – Shall be composed of a Chairman and 6 Members. – The Chairman shall be the presider in all the meetings of the Board, In case of vacancy, the Vice-Chairperson shall do his duties. – The Chairman and Members of the Board shall hold a term of 3 years. – No person who has served 2 successive complete terms shall be eligible for reappointment until a lapse of one year. Powers and Functions of the Board –The Board shall exercise the following specific powers, functions and responsibilities, as stated in Art. 2 Sec. 9 of RA 9298 – The policies resolution, rules and regulations issued or promulgated by the Board...
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...Claudia Parra Auditing Reports December 12, 2012 1. Standard Unqualified Report 3-28: Problem 3 PARRA and ZINDER, P.C. Certified Public Accountants 913 Wildwood Ln Suite 700 Bellaire, Texas 77401 832/877-9359 Independent Auditor’s Report To the Stockholders Auto Delivery Company We have audited the audited the accompanying balance sheets of Auto Delivery Company as of December 31st, 2011 and 2010, and the related statements of income, retained earnings, and cash flows for the years then ended. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Auto Delivery Company as...
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...Auditor, Finical advisers, Tax accountant, Management Accountant, and Government accountant. As we study accounting and accountant we will look at the different boards that governed the accounting field, the education that is required, the standers, ethics, and the different certifications. The different accounting degree and certifications, a person can get a certificate in accounting in one year. An associate degree in two years, a bachelors in four years, a master’s in six, and doctoral in eight years. For any of these accounting degrees a person has to attend college classes. With a certificate, associate and bachelors a person can get their certification as Certified Public Account (CPA) the CPA test consist of four tests. A master’s degree a person can get there Certified Management Account (CMA), and Certified internal auditor (CIA) with a doctoral in accounting a person can go into researchers or teaching (Different Accounting Degrees, 1999). Auditor, there are internal and external auditors, and internal auditors work as a full-time or part- time employee, their job is to find ways for the company to save money. External auditors are hired to make sure their financial reports are factual, or by an agency, government or investors, to make sure the company is following regulations. If the auditor files...
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...The Journey of Accounting The employment for accountants and auditors is expected to grow by twenty percent between 2008 and 2018, which is much faster than the average for all occupations (“U.S. Bureau of Labor Statistics” 5). This shows that accounting is a profession that is very dependable to get a job in. Accounting has been around for ages as it can be traced back to Italy in the Renaissance Era. Accountant’s nature of work is to make sure that business firms run efficiently, public records are kept accurately, and taxes are paid properly and on time (1). Accounting refers to a set of business practices designed to keep careful track of accounts, funds, and transactions between a company and its various stakeholders. The system we use today to track money in business was invented in Italy during the Renaissance. An Italian merchant invented it so that he could easily summarize his results at the end of the day. The system had a simple system of checks and balances to make sure that everything he had recorded was done correctly. The Italian merchant called his system the double-entry accounting system, and it was very simple to understand (Hart 4-5). His name was Luca Pacioli, born in Sansepulcro, Tuscany. Pacioli is known as “The Father of Accounting”. Later on, as trade increased between Europe and the Middle East, business grew beyond what a single owner could even handle. This caused the need for written records so that the business owners could keep up...
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...operating performance whereas Double-entry bookkeeping is the record of transactions that require entries in at least two accounts. * What types of information are critical to the performance of the accounting function in an organization? Answer: Accurate financial information is critical to a business, according to the Accounting principle text, information allows informed judgements and decisions by the users of this information such as owners and partners. * Distinguished-level: * What are the three groups of functions performed by accountants? Answer: According to the text, Accountants observe, identify and measure financial terms and are often referred to as analyze. * Discuss the activities that are part of each group. Answer: the economic events are recorded, classified into meaningful groups and then summarized. They (accountants) report on economic events by preparing financial statements and reports, they also interpret these reports for management, investors, and creditors. Question 2: * Proficient-level: * There are many opportunities available for careers in the accounting profession. Select five from the many presented in the Accounting Principles: A Business Perspective, Financial Accounting text and fully describe the nature of the work performed. Answer: Certified public Accountant (CPA), Certified Management...
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...deferred tax and accruals. Finally, capital is the owner’s equity. Statement of financial position is used to ensure that assets balance with combination of liabilities and capital. Second is the statement of comprehensive income. It provides information on revenues, expenses and profits incurred in a particular period of time. Its major purpose is to help in determining whether the business entity is operating at a profit or loss in a particular trading period. It also serves to reveal the rate of earning per share that is the amount of to be given to each stakeholder. Statement of cash flows is the last financial statement. It shows cash flow activities of a business entity that is operating, financing and investing. In other words, it accounts for cash in hand, cash incurred on expenses and investment activities which are likely to generate cash in future. Statement of cash flows is the best financial statement to use to determine financial health of a...
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...accountants and certified public accountants (CPAs). It's not surprising since many of their duties overlap, but the overall responsibilities of each role and the level of authority held by the positions differ. They all share fiscal responsibility – in degrees – for the company or organization for which they work. Bookkeepers Often considered by accountants and CPAs as just technicians or clerks, bookkeepers perform some of the same daily tasks as do accountants and certified public accountants. Many bookkeepers work as freelancers for small businesses in need of financial recordkeeping. Bookkeepers maintain daily accounting records, posting debits and credits, generating invoices for clients and checks for vendors as well as handling payroll. Many small business owners often double as bookkeepers. Bookkeepers typically lack the education of an accountant or CPA, as they gain on-the-job experience. Professional organizations for bookkeepers help to improve professional recognition for bookkeepers by accounting professionals as well as providing certification programs of abilities and skills. Accountants Accountants have a four-year college degree. While many accountants have an educational background in accounting, some are more general business majors. Companies that generate more than a million dollar in sales each year might have an accountant on staff or hire the services of a professional accountant from an accounting firm managed by a certified public accountant. As...
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...also demonstrate how that organization can enhance one’s professional knowledge and abilities, and how the association to an organization can impact a career in the accounting field of business. In order to do this I must define accounting, its purpose and its four major types of accountants first. The American Institute of Public Accountants defines accounting as “The art of recording, classifying, and summarizing in a significant manner and in te rms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof (Wikipedia.org 2010)”. In other words, accounting is basically about keeping track of the money, and is what businesses use to monitor their income, expenses, and assets over a period of time. Accounting is crucial to the functioning of all organizations it plays the important role in maintaining and processing all relevant financial information that a company requires for its managing and reporting purposes. There are many sectors in accounting one can focus their career on. The four major Accountants are Public, Management, Government, and Internal Accountant. Public Accountants perform a large variety of accounting, auditing, tax, and consulting activities for their clients, which can be corporations, governm ent, non-profit organizations, or individuals. Management Accountant record and analyze the financial information of the companies, and some of the responsibilities are budgeting...
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...Managerial Accounting Accounting: An Interesting and Diverse Career Within the Career Path of Accounting there are certainly a diverse range of options. One can choose to be a Corporate Accounting Assistant, an Accountant, a CPA (Certified Public Accountant), a CMA (Certified Management Accountant), a Forensic Accountant, an IRS Agent, an International Accountant, a comptroller (or controller), or even a Chief Financial Officer (CFO). This is just a few careers in accounting. Accounting also offers all levels of positions from entry level to senior level. One can also be an entrepreneur in the accounting field. A Corporate Accounting Assistant handles accounts receivable and accounts payable. They help prepare financial records as well as help with payroll and the distribution of payroll. They handle company Deposits. A Corporate Accounting Assistant should have a four year bachelor’s degree in accounting or a related field. They should be good at handling pressure, organization, and math. They should be good at learning new programs, like challenges, and be good with dealing with people (Films Media Group, 2007). These are characteristics that everyone in the accounting field should posses. A Certified Public Accountant (CPA) provide a wide variety of services including accounting, tax, auditing, and consulting services to governments, corporations, non-profits, and individuals. CPAs often specialize in a specific area rather than offering services in...
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...assignment we will evaluate the ethical dilemmas of Daniel Potter. Dan is an accountant at Baker Greenleaf. He has been assigned a special audit in which his dilemmas occur. We will discuss many factors that led to the issues Dan is facing. We will describe the dilemmas and give a step-by-step account of how a solution can be reached. Background: While studying for the Certified Public Accountant (CPA) exam, Dan paid close attention to the professional guidelines and code of ethics for accountants. Being of a religious background, ethics was a particularly firm belief for him. He took pride in knowing about ethical situations that could make decisions difficult. Dan also understood that the professional guidelines were to be used as a tool to help in the decision-making process. He believed strongly that “every independent auditor was obligated to maintain professional integrity, if what he believed to be the best economic system in the world was to survive” (Brooks, 2007, p. 285). Baker was receiving a new assignment for a special audit, which was shared with another “Big Eight accounting firm” (Brooks, 2007, p. 286). If all went according to plan, Baker Greenleaf hoped to obtain the account exclusively. The company assigned the best in the company to prepare the audit. Dan was on of the team members chosen. A special one year promotion could be in his future. Gene Doherty was also chosen to help Dan in the assignment. Oliver Freeman, the project manager, assigned Dan...
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...look after the financial matters. Godin Tepe, an archaeological site in western Iran, scripts only containing tables with figures were found. In Tepe Yahya, an archaeological site found in the Kerman Province in Iran, the scripts contained geographical representations as well. In both sites buildings containing large rooms for storage crops had tokens that were used for bookkeeping purposes on clay scripts which represented a cognitive leap for mankind. (Accountancy, n.d.) These early practices of record keeping were used mainly for the record keeper and the proprietor to conduct early business practices. A detailed account of the expenditures of the roman emperor Augustus, the Res Gestae Divi Augusti, listed and quantified the distributions to the people, the grants of land given to army veterans and the financing of temples, shows and games. The account was not of state revenue and expenditure but signified that the executive authority...
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...Action | respondents name | date of action | rule and/or act violation | violation | outcome | No.AC-2012-31 | Abernathy, Sterling Blair | 9/1/2012 | Section 5063 of the Business and Professions Code | failure to report investigation | Surrender of CPA certificate | No. AC-2007-10 | Abreu, John D. | 4/29/2007 | Business and Professions Code, Division 3, Chapter 1, §§ 5100 (c) and 5062. California Code of Regulations, Title 16, Division 1, § 58 | failure to perform audit | Revocation of CPA Certificate | No.AC-2007-20 | Baisden, Lowell A. | 1/8/2008 | Business and Professions Code, Division 3, Chapter 1, §§ 5100 (c), (i) and (j), and 5062. California Code of Regulations, Title 16, Division 1, § 58. | provide false tax advice | Revocation of CPA Certificate | No.AC-2006-13 | Baka, John Edward | 10/20/2006 | Business and Professions Code, Division 3, Chapter 1, § 5100 (c). | participated in the audit under the supervision of George Alan Fisher | Revocation of CPA Certificate | No. AC-2007-18 | Adamic, Jonathan Ernest | 6/17/2007 | Business and Professions Code, Division 3, Chapter 1, § 5100 (h). | failure to practice as an accountant | Revocation of CPA Certificate | No. AC-2009-3 | Affonso, Dale Albert | 10/26/2008 | Business and Professions Code, Division 3, Chapter 1, § 5100 (c) and (g). | implement fraudulent tax shelters | Surrender of CPA certificate | NO. AC-94-14 | Alas, Benigno Bercasio J. | 10/29/1997 | Business and Professions Code, Division 3, Chapter...
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...much because of not only their keen analytical and decision-making skills but also their objectivity, integrity and dedication to service. Many CPAs provide services well beyond accounting, auditing and reporting. The consumer often expects a CPA to be proficient at many specializations, even those just indirectly related to the traditional role of an accountant. The CPA's role has been quickly expanding, and one leading CPA proposed that the term CPA more appropriately stand for Certified Professional Advisor. (www.picpa.org) A CPA is much more than its definition of Certified Public Accountant. The term certified refers to the licensing to carry on business as a CPA and meeting the standards as promulgated by the American Institute of CPAs and the various state societies. The term public accountant refers to the role as an accountant, who handles recordkeeping and reporting matters for the public. However, the term CPA, in sum, means to most people much more than these parts of certified and public accountant. A CPA is a very trusted advisor of both individuals and of businesses. (www.txcpa.net) Enumerating the roles of CPAs will lead the researchers...
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...determining a business’s capability to pay its bills. It represents a breakdown of all transactions, and show how the company acquired its cash and what it is doing with it. Lastly there is the statement of owner’s equity. This statement shows the variations in retained earnings. While all of the financial statements are needed the most important would have to be the cash flows statement. Cash flows is most important because it provides you with the information needed to see if a company can meet its debt and interest payments. Keep in mind that cash flows can be determined by the balance sheet combined with the income statement. A comparison of public accounts to certified public accounts can be narrowed to; anyone can be a public accountant, but in order to become a CPA it takes advanced education and continued learning. Public accountants can prepare a compiled...
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