Question

Answer the following questions in detail :

a)Describe on the roles of the CPA firms and the Institute of CPA. Do they share the same roles? Why or Why not?

b)Discuss the elements of quality control as it relates to a CPA firm

Answer 1

a) The roles of CPA and CPA institute are:

1) To perform the function of tax agents and independent auditing.

2) Providing the accounting knowledge among accountants.

3) Safeguarding the integrity of reporting of various financial statements.

4) Assuring the performance of the business according to rules and regulations.

5) The CPA institute plays an important role in businesses contribution in overall stability and progress of society.

6) The Accounting professionals assists the businesses in corporate strategy, reducing costs, reducing business risks.

7) Finally, taking care of ethical performance of the accountants towards business and public interest.

b) The elements of quality control as it relates to a CPA firm are:

1. Independence, Integrity, and Objectivity : As per AICPA code of professional conduct, not only the management, but also the owners and auditors / accountants must performs their duties without any partiality, honest and defined objectives without any conflicts of interest.
2. Personnel Management : The management must have observed high proficiency of the personnel.
3. Acceptance and Continuance of Clients and Engagements : The policies and procedures are laid down to establish client relation and come out with the specific engagements for every client and services.
4. Engagement Performance : The CPA firm must assures that the engagement must meet the professional standards of quality and regulatory requirements so desired. The engagements must be preformed with all cares.
5. Monitoring : The firm must evaluate the various policies and procedures adopted for the regulation of the firm's business.

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