Question

In: Accounting

In his first address as Chairman of the Board of the American Institute of Certified Public...

In his first address as Chairman of the Board of the American Institute of Certified Public Accountants (AICPA), Robert K. Elliott said: Knowledge leveraging will shape a wide range of CPA services. CPAs will be able to identify relevant information and its sources, perform modeling, devise and apply performance measures of all kinds, design systems to obtain needed information, advise on controls and security, and otherwise ensure relevance and reliability. CPAs will identify and deploy knowledge needed for strategic planning and investments, for marketing decisions, for monitoring internal and external conditions, for conducting daily operations, for maximizing the productivity of employee behavior, and for measuring the effectiveness of operations, personnel and processes. All this and more. Write a paper (your professor will tell you how long the paper should be) to discuss ways in which this chapter agrees with this quote. Discuss any disagreements. Do you think that the CPA should be performing these services? Why or why not?

Solutions

Expert Solution

Yes, CPA should be performing these services.

Certified Public Accountants (CPA) are innovative and strategic thinkers who are well respected for their integrity and commitment to excellence. They are dedicated to each client and work to satisfy their business and financial needs. CPAs provide a number of valuable and useful services to consumers, business owners, government agencies and nonprofit organizations. Their services range from helping an individual develop a personal financial plan to assisting a business owner with things like tax planning, financial statement analysis and understanding complex financial transactions for business decision-making.

Bank loans, debt, interest and assets are essential elements of your business’s financial structure. A CPA can help you develop a powerful business plan, and then bring that plan to life with the proper options. Your CPA’s financial expertise can help you determine how much debt your company can handle; the pros and cons of a loan vs. a line of credit; and how to seek financing from investors.

a CPA can help you choose the optimal structure for your business. Your CPA also can provide sound advice about insurance, commercial property, establishing a board of directors, disaster planning (to protect your data and assets) and succession plan development. In addition, a CPA can advise you on your plan, from job descriptions to strategic hiring to financial — and perhaps familial — considerations.

a CPA can educate you about year-round planning, tax-season preparation and filing, liability and record-keeping. Your CPA also can assist you in deciding whether you want to plan your business according to a calendar or fiscal year.

CPAs understand the capabilities and limitations of a variety of accounting systems, and know how to use technology to help small businesses meet regulations, establish internal controls and obtain information necessary for critical business decisions.

Your CPA can recommend the most efficient and financially viable ways to use technology, from designing systems to manage administrative, sales or manufacturing procedures, to setting timetables for technology upgrades.

Tax Services

Individuals and business leaders look to CPAs for advice on income tax and business tax strategies. They assist clients with personal and business tax planning, preparing income tax returns, and representing individuals before government agencies at federal, state and local levels. As part of their ongoing education, CPAs stay up-to-date on current tax laws and regulations, which can save their clients substantial amounts of money and worry. CPAs take the guesswork out of tax regulations and provide straightforward advice for staying on a clear financial path. Many CPAs are also trained to prepare tax returns or represent a client to tax authorities.

Accounting and Assurance Services

Auditing (also known as assurance services) is one of the most important and well-known services CPAs provide. Audits are conducted annually for publicly owned companies, privately owned businesses, nonprofit organizations and government agencies and groups. These reports help owners and managers make operating decisions, enable creditors to evaluate loan applications, and help individuals make investment decisions. A CPA may provide a client with three distinct services designed to meet a different need: compilation, review or audit.

  • Compilation — The CPA assembles financial statements using the client's data but does not provide assurance on the financial statement. Compilations are useful in assisting small, non-public companies. During a compilation, the data is simply arranged into conventional financial statement form. No probing is conducted beneath the surface unless the CPA becomes aware that the data provided is in error or incomplete.
  • Review — A private company may engage a CPA to perform a review of its financial statements and issue a report that provides limited assurance that material changes to the financial statements are not necessary. With respect to reliability and assurance, a review falls between a compilation, which provides no assurance, and the more extensive assurance of an audit.
  • Audit — A public or private company may engage a CPA to audit its financial statements. Management is responsible for the content of its financial statements regardless of an organization's size or form. The audit, provided by the CPA, is a report that provides an opinion on whether the financial statements are presented fairly in conformity with generally accepted accounting principles. An audit is designed to provide the highest level of assurance that the financial statements are free of material errors and fraud.
  • Internal Controls — Learning how to protect the resources of a company is a key element in running a successful business. CPAs can help business owners understand the importance of organizational controls by evaluating or setting up procedures to reduce the risk of fraud.

Financial Services

To help individuals maximize their income and plan for a secure future, CPAs offer a variety of financial services, which include: personal financial planning, retirement and estate planning, college funding, investing, risk management and business succession planning. A few ways CPAs can help individuals with financial planning include: developing a personal budget, offering recommendations on ways to save for college or planning for retirement. CPAs can also offer advice on investment opportunities or assist with estate planning needs to ensure beneficiaries receive the maximum benefits.

Business and Management Consulting

CPAs play a vital role in helping businesses make better use of their resources and increasing efficiency and profitability. With careful planning and help from a CPA, you can learn how to start, manage and successfully grow a business. CPAs can offer advice in such areas as:

  • Small business management
  • Cash management
  • Compensation plan evaluations
  • Growth planning
  • Purchasing or selling a business
  • Measuring the performance of a business
  • Disaster recovery planning

CPAs are trained to look at businesses with an objective eye. They can help you identify weaknesses in your organization and offer suggestions for improvements. A CPA can be your most valuable business partner, one who helps you reach for success.

Litigation Services

CPAs are considered the foremost authorities on financial and economic issues. In the legal arena, CPAs act as either expert witnesses or consultants, presenting private advice to attorneys. CPAs also assist clients in divorce settlements, fraud investigations, bankruptcies and alternative dispute resolutions. For example, a divorce can have a dramatic impact on a person's tax liability. A CPA can offer advice on how to reduce the tax liability and help a client continue to meet personal financial goals.


Related Solutions

Go to the website of the American Institute of Certified Public Accountants (www.aicpa.org) and the Institute...
Go to the website of the American Institute of Certified Public Accountants (www.aicpa.org) and the Institute of Management Accountants (www.imanet.org). Browse the sites and find the requirements for becoming a certified public accountant (CPA) and a certified management accountant (CMA). Compare the requirements of the programs and decide which program is more appealing to you. Why is it more appealing?
What is the role of The American Institute of Certified Public Accountants and their role in...
What is the role of The American Institute of Certified Public Accountants and their role in advising the FASB?
Go to the American Institute of Certified Public Accountants (AICPA) website to read the current AICPA...
Go to the American Institute of Certified Public Accountants (AICPA) website to read the current AICPA code of professional conduct, located at http://www.aicpa.org/Research/Standards/CodeofConduct/Pages/default.aspx. Next, assess the effectiveness of the current Institute of Management Accountants (IMA) code of professional conduct in promoting ethical behavior and providing guidance for the dilemmas managerial accountants are confronted with today. For the first part of this Week’s discussion, compare the IMA code of conduct to the AICPA code of professional conduct and assess the effectiveness...
For this discussion: Read the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct....
For this discussion: Read the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. Read and assess the current Institute of Management Accountants (IMA) Statement of Ethical Professional Practice, which promotes ethical behavior and provides guidance for the dilemmas managerial accountants are confronted with today. For the first part of this week’s discussion: Compare the IMA Statement of Ethical Professional Practice to the AICPA Code of Professional Conduct and assess the effectiveness of the two codes. For the...
The American Institute of Certified Public Accountants (AICPA) issued the Statement on Standards for Attestation Engagement...
The American Institute of Certified Public Accountants (AICPA) issued the Statement on Standards for Attestation Engagement (SSAE) No. 10 (AT Sec. 301) “Financial Forecasts and Projections”. Visit the AICPA website (www.aicpa.org) and write a report to summarize the auditors’ responsibilities regarding prospective financial statements and the key requirements of the SSAE No. 10. Your report should include the following: Explanation of the uses of the prospective financial statements. Discussion of the auditor’s compilation of the prospective financial statements. Discussion of...
The American Institute of Certified Public Accountants (AICPA) and International Federation of Accountants (IFAC) assumes that,...
The American Institute of Certified Public Accountants (AICPA) and International Federation of Accountants (IFAC) assumes that, at a minimum, all accountants will be proficient in the AIS user role and at least one other role listed above (manager or designer or evaluator). Why would the AICPA and IFAC expect this proficiency?
1. Please discuss the American Institute of Certified Public Accountants (AICPA) and their Code of Professional...
1. Please discuss the American Institute of Certified Public Accountants (AICPA) and their Code of Professional Conduct as it relates to ethics in accounting. 2. Please describe the six stages of moral development developed by Lawrence Kohlbert and relate them to ethics in accounting. 3. Please describe and critique the core philosophy of consequentialism and deontology and relate them to ethics in accounting. 4. Please discuss the core elements of the distributive justice philosophies developed by Aristotle and Rawls and...
The American Institute of Certified Public or the AICP has developed seven principles governing audits. Which...
The American Institute of Certified Public or the AICP has developed seven principles governing audits. Which two of the seven principles specifically relate to audit reporting?
What is the relationship between the American Institute of Certified Public Accountants towards other authoritative rulemaking...
What is the relationship between the American Institute of Certified Public Accountants towards other authoritative rulemaking boards such as The International Accounting Standards Board (IASB), The Government Accounting Standards Board, and the HFMA Principles and Practice Board?
Read the Code of Professional Conduct [PDF] from the American Institute of Certified Public Accountants (AICPA)...
Read the Code of Professional Conduct [PDF] from the American Institute of Certified Public Accountants (AICPA) website. Review the code's key requirements. From the reading, determine at least two AICPA professional conduct principles most likely to be violated. Provide your supporting rationale.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT