CPA Report
ACC 545/Financial Reporting
November 21, 2011
Deborah Asbury Introduction Certified public accountants (CPAs) have many professional responsibilities whether completing a review or an audit of the client’s financials. CPAs can also ask the opinion of other CPAs during the course of completing work for clients. The firm has been asked to provide information on the correct way to calculate deferred taxes, the correct way to report accounting changes and error corrections, and why a company would want to establish a subsidiary as a corporation.
CPAs Professional Responsibilities According to the American Institute of CPAs (AICPA) CPAs not only have responsibilities to those who use their services but they must also cooperate with other CPAs to improve the accounting principles, maintain the public’s confidence, and carry out the responsibility of self-governance (www.aicpa.org, 2011). All CPAs must exercise a level of integrity showing they are exercising due care with all responsibilities. CPAs must practice objectivity by being impartial, honest, and free of conflicts of interest. A CPA must also make certain that any relationship they have with clients would not impair the objectivity while completing attestation services, therefore maintaining independence (www.aicpa.org, 2011).
Review versus Audit A review and audit both look at the data provided in a company’s financials. The main difference between the two is how in depth the information is looked at. A review is completed by looking at a client’s internal data and asking questions of employees and management. A review usually does not include contacting the client’s bank or vendors or customers or other outside sources to verify closing balances and other information, unless the CPA feels it is absolutely necessary. A review does not provide as high of a level of assurance