Question

a) Discuss each of the four categories of services provided by CPA firms

b) Two types of attestation services provided by CPA firms ate audits and reviews. Discuss the similarities and differences between these two types of attestation services. Which type provides the most assurance?

Answer 1

Part a

4 catagories of services provided are:

• Tax consultancy where they prepare income tax returns and provide tax planning consultancy
• Bookkeping services where they provide services of book keeping and accounting to the clients on outsourcing basis in line with various accounting standards applicable for them
• Financial services of helping clients in making their loan applications and availaing corporate loans.
• Audit services where they attest the financial statements of the clients as per applicable laws.

Part B

Two types of attestation services provided are review and audit of the historical financial statements. +

Similarity:

• Both meet financial statement users need
• Both require evidence and follow of accounting as well as auditing standards while performing the duty

Differences:

• The CPA provides a lower level of assurance for reviews of financial statements compared to the high level for audits, therefore less evidence is needed.
• Review can be provided by a CPA firm at a much lower fee than an audit

Since audit is more regerious, requires more evidence, time and efforts it proivdes more assurance than review.

Hope this helps.