Question

Part 1—What are the requirements for becoming a CPA in Pennsylvania (or another state if you plan to become certified in a state other than Pennsylvania).

Part 2—Briefly define and explain each of the following terms: AICPA; SEC; PCAOB; FASB; GAAP; GAAS.

Answer 1

Based on the question, we can answer the following:-

Certified Public Accountancy (CPA) is a course within the United States of America for people who would like to pursue a career in Auditing and accounting.

Part 1 :- I would like to pursue a CPA qualification from the state of Alaska. For any person who is interested to become a Certified Public accountant in the state of Pennsylvania, he should satisfy the following requirements for being eligible to take up the CPA exam:-

a.) Be atleast 19 years of age and of good moral character, and;

b.) meet one of the following requirements :-

i.) Degree and accounting concentration which includes

* A completed bachelor degree or its equivalent , conferred by regionally accredited university

* twenty four semester hours in accounting

* three semester hours in business law

* three semester hours in economics and

* three semester hours in college level math, statistics and/or computer sice

ii.) Degree and accounting which includes

* A completed bachelor degree or its equivalent , conferred by regionally accredited university

* fifteen semester hours in accounting

iii.) Degree in progress and accounting which includes

* the applicant is within 18 semester hours of completing a bachelors degree or its equivalent from a regionally accredited college or university and

* completion of 15 semester hours in accounting

iv.) Degree and qualifying experience which includes

* A completed bachelor degree or its equivalent , conferred by regionally accredited university

* completion of one year of public accounting experience directly under a Certified Public accountant (CPA)

c.) Once either of these requirements are met, the candidate becomes eligible to take up the CPA exams. The CPA exams are split into 4 sections which include Financial Accounting and Reporting, Business Environment and Ethics, Auditing and Regulation.

d.) A candidate is required to score 75 marks in each of the sections to clear the exams conducted by Nasba.

e.) Once the candidate clears the exam, he can apply for the licensure with the respective state board (Alaska in our case) where he would be given the right to practice subject to him meeting various other requirements as laid down by the accountancy board of the state.

Part 2 :-

AICPA - The term AICPA stands for American Institute of Certified Public Accountants (AICPA). The AICPA is the governing body that governs all the private company audits performed within the United States of America. The organization sets ethical standards and frameworks for the auditors to comply while performing and reporting on the financial statements of the company. The AICPA is also responsible in developing , maintaining and the grading of the Cpa examinations conducted across the world.

SEC - The Securities and Exchange Commission (SEC) is an independent body of the United States government. The SEC oversees all transactions related to the securities industry within the United States of America. The SEC primarily monitors the key participants in the securities industry : namely security exachanges, brokers and traders, mutual funds and investment advisors. All the companies are required to file their financials with the SEC.

PCAOB - The Public Company Accounting Oversight Board (PCAOB) is the body that governs the audity of the public companies in the United States of America. The accounting oversight board governs the rules and regulations under which the audits of listed companies are performed.The PCAOB through the execution of its duties protects the investors, government agencies, other issuers, brokers, underwriters, dealers, etc by exercising proper care and due diligence to ensure that the public companies audit are performed in line with the standards. The PCAOB might conduct surprise inspections over the audits performed on the public companies to ensure if they were following the right practices.

FASB - The Financial Accounting Standards Board (FASB) is an independent organization that is responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations within the United States of America. The FASB has the authority and responsibility to provide updates to the Generally accepted accounting principles for all the private , public and non profit companies across the United States of America. The FASB is recognized as the Accounting standards decider that needs to be followed by companies in performing the audits.

GAAP - The generally accepted accounting principles (GAAP) are the set of rules, regulations , principles, standards that are issued and updated from time to time by the Financial Accounting Standards Board (FASB) . Public companies are required to follow the US GAAP in performing their audits. An audit done in accordance with GAAP is bound to increase the confidence of all the investors and stakeholders associated with the company. The financial statements , on which the auditors of the company, opine on , is also prepared to be in confirmity with GAAP.

GAAS - Generally Accepted Auditing standards (GAAS) are the auditing standards that help measure of the quality of the audits. The GAAS help the auditors to ensure transparent and unbiased auditing. GAAS helps in achieveing highest quality audits that will help to compare the audits of various companies easily. These are generally used for auditing of the private companies. The auditors are required to maintain a certain level of proficiency, exercise utmost care, diligence and also maintain a high level of independence in conducting their audits.