Gloria and Deloria, CPAs, have recently started their public accounting firm and intend to provide attestation and a variety ofconsulting services for their clients, which are all nonpublic. Both Ms. Gloria and Mr. Deloria have particular expertise in designingpayroll and other disbursement systems. Ms. Gloria is concerned about whether any of the following services would impair theiraudit independence.a. For each of the services in the accompanying table, provide a judgment as to whether providing the service would impairattest independence. Assume that management has designated a management-level individual to be responsible for overseeingthe CPA's services and has established appropriate internal control. Also assume that the client is privately held and does notreport to the SEC.b. Now assume that the services are being contemplated for nonattest clients. Which of the services does the AICPA Code ofProfessional Conduct prohibit under this assumption?SituationNumber1.2.3.4.5.6.Service DescriptionProvide of the tial training and struction toimplemented payroll information and control system.Prepare the payroll tax return form and sign it on behalf of management.employees on a newlyAccept responsibility to sign payroll checks, but only in emergency situations.Approve employee time cards.Customize and implement a prepackaged payroll system.Post client approved entries to client's trial balance.Independence Impaired(Yes, No, Indeterminate)a. attest clientb. nonattest client

Accounting Assumptions -A set of guidelines known as accounting assumptions guarantees that an…

Gloria and Deloria, CPAS, have recently started their public accounting firm and intend to provide attestation and a varie consulting services for their clients, which are all nonpublic. Both Ms. Gloria and Mr. Deloria have particular expertise in payroll and other disbursement systems. Ms. Gloria is concerned about whether any of the following services would im audit independence. a. For each of the services in the accompanying table, provide a judgment as to whether providing the service would in attest independence. Assume that management has designated a management-level individual to be responsible for o the CPA's services and has established appropriate internal control. Also assume that the client is privately held and do report to the SEC. b. Now assume that the services are being contemplated for nonattest clients. Which of the services does the AICPA C Professional Conduct prohibit under this assumption? Situation Number 1. Service Description Provide all of the initial training and instruction to client employees on a newly implemented payroll information and control system Independence Impaired (Yes, No, Indeterminate) a. attest client b. nonattest client

Gloria and Deloria, CPAS, have recently started their public accounting firm and intend to provide attestation and a varie consulting services for their clients, which are all nonpublic. Both Ms. Gloria and Mr. Deloria have particular expertise in payroll and other disbursement systems. Ms. Gloria is concerned about whether any of the following services would im audit independence. a. For each of the services in the accompanying table, provide a judgment as to whether providing the service would in attest independence. Assume that management has designated a management-level individual to be responsible for o the CPA's services and has established appropriate internal control. Also assume that the client is privately held and do report to the SEC. b. Now assume that the services are being contemplated for nonattest clients. Which of the services does the AICPA C Professional Conduct prohibit under this assumption? Situation Number 1. Service Description Provide all of the initial training and instruction to client employees on a newly implemented payroll information and control system Independence Impaired (Yes, No, Indeterminate) a. attest client b. nonattest client

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Gloria and Deloria, CPAs, have recently started their public accounting firm and intend to provide attestation and a variety of
consulting services for their clients, which are all nonpublic. Both Ms. Gloria and Mr. Deloria have particular expertise in designing
payroll and other disbursement systems. Ms. Gloria is concerned about whether any of the following services would impair their
audit independence.
a. For each of the services in the accompanying table, provide a judgment as to whether providing the service would impair
attest independence. Assume that management has designated a management-level individual to be responsible for overseeing
the CPA's services and has established appropriate internal control. Also assume that the client is privately held and does not
report to the SEC.
b. Now assume that the services are being contemplated for nonattest clients. Which of the services does the AICPA Code of
Professional Conduct prohibit under this assumption?
Situation
Number
1.
2.
3.
4.
5.
6.
Service Description
Provide of the tial training and struction to
implemented payroll information and control system.
Prepare the payroll tax return form and sign it on behalf of management.
employees on a newly
Accept responsibility to sign payroll checks, but only in emergency situations.
Approve employee time cards.
Customize and implement a prepackaged payroll system.
Post client approved entries to client's trial balance.
Independence Impaired
(Yes, No, Indeterminate)
a. attest client
b. nonattest client

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