AUDITING+ASSURANCE 12MONTH ACCESS CARD
AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Chapter 2, Problem 1RQ
To determine

Describe the important characteristics of the organization and conduct of CPA firms that allows them for fulfilling the social functions competently and independently.

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Explanation of Solution

The following are three important characteristics:

  • Organizational form: To avoid the employer-employee relationship with the clients the CPA firms are existing as the separate entities. This firm employs one person as a professional staff of sufficient size for preventing one client from constituting an important portion of its total income and thereby endangering the independence of the firm.
  • Conduct: For providing a broad range of expertise, continuing education and to promote the professional independent attitude and competence, the CPA employs a professional staff for the particular groups.
  • Peer Review: This helps in evaluating the performance of CPA firm in order to keep the competence high.

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