Ch2review answer1

Ch2review answer1 - Chapter 2 The CPA Profession Key...

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Chapter 2 The CPA Profession Key Objectives (from text): 1. Describe the nature of CPA firms, what they do, and their structure. 2. Understand the role of the Public Company Accounting Oversight Board (PCAOB) and the effects of the Sarbanes-Oxley Act on the CPA profession. 3. Summarize the role of the Securities and Exchange Commission in accounting and auditing. 4. Describe the key functions performed by the AICPA. 5. Discuss the relationship of U.S. and international auditing standards. 6. Know the three categories and content of generally accepted auditing standards (GAAS). 7. Identify quality control standards and practices within the accounting profession, especially peer review. 1. Certified Public Accounting Firms A. CPA firms can be described as belonging to four categories (see table on p. 26 of text): 1. Big Four 2. National 3. Regional 4. Local firms B. Changes in the structure of the profession 1. Mergers reduced the Big 8 to the Big 5. 2. Andersen essentially dissolved after Enron and Department of Justice indictment. 3. Consulting became the largest source of revenue for Big 5 until each firm except Deloitte & Touche disposed of their consulting practice. Andersen consulting separated from Andersen, was renamed Accenture, and went public. KPMG Consulting separated and issued public
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This note was uploaded on 10/07/2011 for the course ACCOUNTING 4220 taught by Professor Brown during the Spring '11 term at UMBC.

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Ch2review answer1 - Chapter 2 The CPA Profession Key...

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