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Cpa Report for Acc 545

In: Business and Management

Submitted By queen4life1985
Words 589
Pages 3
Memorandum
To: Manager
CC: CPA Report
From: Victoria Callahan
Date: 3/4/2013
Re: CPA Report
Knowing what to write in the CPA report is important because of the information that is being used to make decision with. In the report it includes the questions that have been ask and what the responsibilities is for a CPA.
The method that is used for deferred taxes is temporary difference. Temporary difference is the difference between the tax basis of an asset or liability and its reported (carrying or book) amount in the financial statements (Kieso, Wyegrandt, and Warfield, 2007). The reason is that the difference in the timing of the recording of the revenue and expenses. The accounting method that is used for deferred taxes is accrual. Deferred tax is recognized on the financial statements when the taxes are recognize on the asset or liability.
The retrospective approach is an approach that the Financial Accounting Standards Board requires for companies when reporting accounting changes (Kieso, Wyegrandt, and Warfield, 2007). In this approach, when one would make the changes of the accounting principle he or she would go back in previous financial statement to make the changes. This would show the consistency in the company financial statements. When reporting an error the same principle applies. When making corrections to an error, one must restate the prior statement in order to correct the error. Afterwards, document what the error was and report it to the company management.
When a company becomes acquired during an acquisition it becomes a subsidiary. The two main reasons why companies become subsidiaries is either management or financial issues that the company may have. A subsidiary company need for a company to come in to provide controls and stability in the company structure. A subsidiary is able to keep the identity of their company; however the...

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