Chapter 02 Slides

Chapter 02 Slides - TheCPAProfession Chapter2 ACCT...

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2 - 1 The CPA Profession Chapter 2 ACCT 4510/5510
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2 - 2 - 2 Certified Public Accounting Firms The legal right to perform audits is granted to CPA firms by regulation of each state. CPA firms also provide many other services to their clients, such as tax and consulting services. ACCT 4510/5510 CPAs continue to develop new products and services- such as financial planning, business valuation and information technology.
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2 - 2 - 3 Certified Public Accounting Firms Big Four international firms National firms Regional and large local firms Small local firms ACCT 4510/5510
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2 - 2 - 4 Certified Public Accounting Firms The four largest CPA firms in the United States are called the “Big Four” international CPA firms. These four firms have offices in most major cities in the United States and in many cities throughout the world. ACCT 4510/5510
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2 - 2 - 5 Management consulting services Tax services Accounting and bookkeeping services Activities of CPA Firms ACCT 4510/5510
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2 - 2 - 6 Structure of CPA Firms Three main factors influence the organizational structure of all firms: 1. The need for independence from clients. 2. The importance of a structure to encourage competence. 3. The increased litigation risk faced by auditors. ACCT 4510/5510
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2 - 2 - 7 Organizational Structure Proprietorship Professional corporation General partnership Limited liability company General corporation Limited liability partnership ACCT 4510/5510
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2 - 2 - 8 Hierarchy of a Typical CPA Firm Staff Level Experience Typical Responsibilities Staff assistant 0-2 years Performs most of the detailed audit work Senior or in-charge auditor 2-5 years Responsible for the audit field work, including supervising staff work ACCT 4510/5510
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2 - 2 - 9 Hierarchy of a Typical CPA Firm Staff Level Experience Typical Responsibilities Manager 5-10 years Helps the plan, manages the audit, reviews work, and works with the client Partner 10+ years Reviews audit work and makes significant audit decisions ACCT 4510/5510
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2 - 2 - 10 10 This Act is considered by many observers to be the most important legislation affecting
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Chapter 02 Slides - TheCPAProfession Chapter2 ACCT...

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