Question

As stated in the Executive Summary of the Journal of Accountancy article, three of the most common complaints made against small to midsize CPA firms involve failure to return client records on a timely basis, failure to exercise due professional care and conflicts of interest. Select one of these issues and discuss why you feel it is the most important.

Answer 1

Failure to exercise due professional care is the most important issue among all the three given. Any organization run on some rules and conduct which makes the work professional.

In a CPA firm it is very important that every auditor is working independently and professionally. If they fail to exercise professional care ,they may mislead the stakeholders and company to be audited by making wrong reports.

This is not right as for any auditor or accoutant it is advised to work ethically and present right reports. When an auditor presents wrong statements or report, people and investors develop a wrong perspective of the company and accordingly they develop their investment decision. If auditing is done wrong, then reports are wrong and depending on those reports the decision is also not profitable. The investor can face uncertainty later on.

If the higher authorities come to know about this fraud, they will case againsr the CPA firm to make auditors work according to the company needs and not independently. The auditors jau also suffer as theur license could be cancelled. Also the firm which is being audited, can face troubles as it may be thought that for its own benefit, it jas alpeoached the CPA firm to make misstatements on its report or auditing to show more profit and attract investors.

So, it is very important that the auditors are working professionally.