The CPA Profession

1
The CPA Profession

• Chapter 2

2
CPA Firms

• The Big Four
• National Firms
• Regional Firms
• Local Firms

3
Structure of Firms

• Proprietorships
• General partnerships
• General corporation (generally prohibited)
• Professional corporations (state by state)
• Limited liability company (LLC)
• Structured and taxed like partnership
• LLPartnership liability constraints

4
Sarbanes Oxley Act

• PCAOB
• Oversight for auditors
• Establishes auditing standards
• Establishes quality control standards
• Peer reviews
• All used to belong to AICPA
• SAS
• Issued by ASB of AICPA
• Adopted for now, still for non-public

5
SEC

• Established by Securities Act of 1933
• Has considerable oversight of accountants,
  auditors, and firms
• Forms S-1 S-16 relate to new securities
• Form 8-K significant events
• Form 10-K annual report
• Form 10-Q

6
AICPA

• National professional organization of accountants
• Sets professional requirements
• Writes and grades CPA exam
• Conducts research
• Publishes guidance on industry issues
• Promotes the profession

7
Standards written by AICPA

• SAS
• Codification of SAS
• Compilation and Review stds
• Other attestation stds
• Consulting stds
• Code of Professional Conduct
• Publishes Journal of Accountancy

8
Generally Accepted Auditing Standards (SAS 1)

• General Standards
• Adequate technical training and proficiency
• Independence
• Due professional care
• Fieldwork Standards
• Planning and supervision
• Understanding clients internal control
• Sufficient competent evidential matter

9
GAAS, continued

• Reporting Standards
• In accordance with GAAP
• Inconsistency
• Inadequate disclosures
• Expression of opinion on statements as a whole
• GAAS versus PCAOB auditing standards

10
PCAOB Standards to Date

• PCAOB AS1 References in reports to standards
  of the PCAOB (USA)
• PCAOB AS2 Audit of Internal Control
• PCAOB AS3 Audit Documentation
• Proposed standards concern
• Elimination of material weaknesses
• Independence

11
Other Standard Issuers

• SAS still in effect for non-public companies
• ISAs issued by International Auditing Practices
  Committee of IFAC
• Other national bodies

12
Quality Control

• AICPA Quality Control Standards Committee,
  elements of QC
• Peer Review
• PCAOB