Concept explainers
Will Williams, a college senior, has begun the interviewing process. He has discovered a great variety of organizations in search of “accounting majors.” He finds that various public accounting firms, corporations, the GAO, and the IRS are all interviewing candidates at his school. Will has come to you for advice. He has suggested that although he has had only one class session of auditing, he already realizes that it is going to be a great course; however, he also especially enjoyed his tax and accounting systems courses.
Required:
Compare and contrast his possibilities with public accounting firms, corporations, the GAO, and the IRS if he wishes to emphasize the following areas of expertise:
- a.
Taxation . - b. Auditing.
- c. Systems design.
For example, first compare and contrast his likely responsibilities with each of the above organizations if he chooses to emphasize taxation.
Want to see the full answer?
Check out a sample textbook solutionChapter 1 Solutions
Principles Of Auditing & Other Assurance Services
- Mr. Henry Dominic, Director of Dominic CPA Review Schools was considering the use of a new practice at the end of the two-week introductory portion of his class. The set was designed to meet two principal objectives. First, he hoped that it would serve as a screening device for identifying those students who had failed to grasp some of the more elementary concepts of financial accounting. Second, the set was designed to serve as a vehicle for introducing several new concepts which would be covered in more depth in the next section of this course. The beginning of the year balance sheet for the green Ville Company was as follows: Cash.. Inventory.. ASSETS Total current Assets.... Property, plant and eqpt.... Less: A/D PPE.. Net Fixed Assets.. Total Assets............ FINANCIAL REPORTING June 1 GREEN VILLE COMPANY Balance Sheet As of January 1, 2021 P25,000 10,000 35,000 15,000 5,000 10,000 P45,000 EQUITIES Accounts payable......... .P10,000 Total Current Liabilities..... 10,000 Capital…arrow_forwardYou recently attended your five year college reunion. At the main reception, you encountered an old friend, Dashawn Beagle, who recently graduated from law school and is now practicing with a large law firm in town. When you told him that you were a CPA and employed by a regional CPA firm, he made the following statement: "You know, if the securities acts had not been passed by Congress in the 1930s, no one would be interested in having a audit performed." Required: Draft a memo that highlights your thoughts about Dashawn's statement that audits only take place ecause they are required by law.arrow_forwardAssume that you have finished your MBA program and have applied for a position in the Financial Accounting Department of a large multinational company. The company is struggling with its accounting reporting matters and several accounting reports are under regulatory scrutiny. In the interview board, the recruitment committee members have asked you the following questions. What have you learnt in the BUS 505 course relating to financial accounting? How you can contribute the Financial Accounting Department of this company if you are recruited?arrow_forward
- A. Sandy is a new accounting student in College PTI. She questions the need for and the benefit of an audit, "I am curious to know why we should hire an auditor to audit a company. I thought a company has their own internal auditor. Why should we pay for an extemal auditor services to review our company's financial statements?" Required: a) Explain to Sandy the need for and benefits of an audit of financial statements. b) Discuss TWO (2) differences between external audit and internal audit services.arrow_forwardDave and Charlie are sitting at lunch one day on the premises of one of their large audit clients when the topic of going concern comes up. Dave mentions to Charlie that he vaguely recalls hearing this term in his accounting classes back in college, but doesn't remember what this means or why it is part of the audit. Which of the following responses by Charlie would help Dave to understand this? (Select all that apply.) Going concern deals with the entity's ability to continue operating as an enterprise, and is an important assumption that the auditor should evaluate. The going concern assumption is required to be evaluated by management each year for the forthcoming year. The going concern assumption is tested by evaluating management's breach of loan and debt covenants over the past three years. Going concern really speaks to the client firm's ability to pay its short-term liabilities when they come due, and whether the firm will need to refinance maturing loans to conserve cash.arrow_forwardAndy Simmons is a CPA with his own accounting and tax practice. He occasionally does an audit for small business clients. One day an audit client shows Andy a letter from the local Property Tax Assessor’s office. It seems the client inquired about the process to be followed to appeal the 20 percent increase in his property taxes. He already wrote an appeal letter and was denied. The letter said that most folks who appeal those decisions hire a CPA to represent them before the administrative board in property tax assessment hearings. If your client asks you to represent him in the appeal process, can you do so under the AICPA Code? Explain.arrow_forward
- Max Maxwell has been the audit engagement partner for the external (financial statement) audit of Acme Global Freight Limited (Acme), a listed company, for approximately 10 years and Acme has been an audit client of Max’s accounting firm, Maxwell & Partners, for nearly 30 years. Max’s daughter has just accepted a job with Acme as a group accountant. This role would entitle Max’s daughter to share options in Acme as part of her remuneration package. Acme has just awarded an assignment to advise on the tax treatment of complex financial transactions to a tax partner of Maxwell & Partners. The managing director of Acme has invited Max as a guest to Acme’s corporate box for an upcoming super rugby game and he has also asked if Max would mind accompanying him on some visits to investments banks to discuss Acme raising new share capital. An accounting partner at Maxwell & Partners has seconded a staff member to Acme for a 3-month period to cover for one of Acme’s accountants who…arrow_forwardMax Maxwell has been the audit engagement partner for the external (financial statement) audit of Acme Global Freight Limited (Acme), a listed company, for approximately 10 years and Acme has been an audit client of Max’s accounting firm, Maxwell & Partners, for nearly 30 years. Max’s daughter has just accepted a job with Acme as a group accountant. This role would entitle Max’s daughter to share options in Acme as part of her remuneration package. Acme has just awarded an assignment to advise on the tax treatment of complex financial transactions to a tax partner of Maxwell & Partners. The managing director of Acme has invited Max as a guest to Acme’s corporate box for an upcoming super rugby game and he has also asked if Max would mind accompanying him on some visits to investments banks to discuss Acme raising new share capital. An accounting partner at Maxwell & Partners has seconded a staff member to Acme for a 3-month period to cover for one of Acme’s accountants who…arrow_forwardComment upon each of the following statements you heard in a conversation between two newly hired staff auditors.a. “Of course, I’m qualified to be assigned to this engagement. I have an accounting degree from a top university and was an honors graduate. I know some of the accounting rules have changed since I graduated, but I’ll be able to figure that out as we go through the audit.”b. “It doesn’t really matter what others think. . . . I’m completely independent of Acme Industries and should be a member of the audit team. While I own some stock, it’s a small amount and I’m holding it for the long term, anyway.”c. “You really have to question everything the client tells you. That’s what professional skepticism is all about. It’s a shame you can’t believe a word they say.”d. “The evidence is lower in quality, but we typically use internal evidence when we audit property, plant, and equipment. It just takes too much time and costs too much to get more reliable evidence.”e. “On that last…arrow_forward
- Assume that you are already a certified public accountant and has an accounting firm. you will introduce yourself to a client and you have all the services thay public accounting can offer. Explain to your client why he/she would need your services. Hi! I am _______ (yourname) a Certified Public Accountant and I owned _____________ (name of your accounting firm). I offer external auditing wherein I __________________________________________________________________________________________________________________________________________. I am also expert in Tax preparation and planning. I can help you to ________________________________________________________________________________________________________________________________________________________________________. Oh, before I forgot I have a lot of experience in Management advisory services I can give you a lot of effective advices such as…arrow_forwardIn 2008, Arnold Diaz was a bright, upcoming audit managerin the South Florida office of a national public accounting firm. He was an excellenttechnician and a good “people person.” Arnold also was able to bring new business intothe firm as the result of his contacts in the rapidly growing Hispanic business community.Arnold was assigned a new client in 2009, XYZ Securities, Inc., a privately held broker–dealer in the secondary market for U.S. government securities. Neither Arnold nor anyoneelse in the South Florida office had broker–dealer audit experience. However, the AICPAand Arnold’s firm had audit aids for the industry, which Arnold used to get started.Arnold was promoted to partner in 2009. Although this was a great step forward forhim (he was a new staff assistant in 2000), Arnold was also under a great deal of pressure.Upon making partner, he was required to contribute capital to the firm. He also thoughthe must maintain a special image with his firm, with his clients, and…arrow_forwardYou are young CIA just starting your own practice in Lollywood, Lahore, after 5 years’ experience with a “big six” firm. You have several connections in the entertainment industry and hope to develop a practice rendering income tax, auditing and accounting services to celebrities and other wealthy clients. One of your first engagements is arranged by Mr. Naveed, a long establish business manager for a number of celebrities and a personal friend of yours. You are engaged to audit the personal statement of financial conditions (balance sheet) of a Mr. Ijaz. However, the star also has a reputation as an extreme recluse who is never seen in public except at performances. Mr. Aneeq handles all of Mr. Naveed‘s business affairs, and all of your communication with Mr. Naveed are through Mr. Aneeq. You have never met Mr. Naveed personally and have no means of containing the star directly. All of Mr. Naveed business records are maintained at Mr. Aneeq office. Mr. Aneeq also issues cheques for…arrow_forward
- Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning