What Makes A Good Faith Audit?

This case implies that no auditor with the firm of Abernethy and Chapman has an in-depth understanding of the consumer electronics industry. Is a CPA firm allowed to accept an engagement without having established the necessary expertise to oversee the audit? The first

Knowledge about risks related to the company evaluated as part of the auditor 's client acceptance and retention evaluation; and the relative complexity of the company 's operations. ( Auditing Standard No. 9 //. (n.d.).

One of the advantages to being a CPA within a large firm is that you have the opportunity to work in many areas of accounting for many varied company clients. This will give me a multifaceted experience level not easily obtained while working independently or for a smaller firm. I hope to have the opportunity to do some forensic accounting work where I would prove suspected embezzlement within a client’s company (S. Westfield, personal interview, August 1, 2008).

When auditing a publicly held company, auditors need to observe principles. The ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of

The CPA firm should not issue an unqualified opinion based on these circumstances. The unpaid accounting fees may cause the CPA firm to have doubts about the client’s ability and willingness to pay for its services. As a result, the CPA firm’s judgment may be influenced by these doubts, and it may not be able to properly evaluate the client during the audit in a manner that is unbiased and impartial. Instead, the CPA firm should issue a qualified opinion that discloses the potential lack of independence caused by the past due billing. It is essential for CPAs to follow the standards of independence so that they maintain a reputation of integrity among the public (Dodaro, 2013).

Auditor independence and a prohibition on audit firms offering value-added (read "conflict of interest") services

The architectural design of a firm varies greatly. In 1950, the business environment of Arthur Andersen included using the computer effectively for automated bookkeeping. Structure and regulation of the markets, helped Arthur Andersen to develop into a well-respected and reputable auditing company. The federal law in the 1930s requiring companies to turn over their financial statements yearly to an independent auditor not only strengthened Arthur Andersen, but also helped with their impeccable reputation. Arthur Andersen’s strategy included quality audits with a well-managed staff and profits. Promotions and rewards were plentiful when auditors made sound auditing decisions. In the 1990s, Arthur Andersen’s organizational architecture and strategy focused on generating new business, cost cutting, and performance evaluations along with decision rights over its business (Brickley, Smith, & Zimmerman, 2009).

As stated by Schroeder, el. (2005), my professional responsibilities as a CPA include independence, scope of services, confidentiality, practice development, and differences on accounting issues. It is my responsibility to keep my professional judgment unbiased and base my opinions on factual information and to keep my personal interest separate from the clients work. It is my responsibility not to indulge any client with nonaudit services not relating to the financial audit. It is my responsibility to keep the clients information confidential and only report information that is deemed necessary for investors and outside users. It is my responsibility to not enter in to any advertisement that would be misleading or untrue. It is my responsibility to determine and discuss with the client any differences in accounting issues that related to how transactions are

An important decision for any shareholder is deciding whether or not to do business with that company. When a business is audited, the operations are reviewed to make sure that nothing is being hidden. An auditor will review the company’s financial statement and practices to confirm that each are direct and correct. The financial statements are the business’s way of representing them and showing that they are following the Generally Accepted Accounting Principles. The audit process is an important one because it provides a platform for the auditor’s opinion concerning the financial statements of the company. As part of the audit process the auditor will conduct an audit plan that outlines a number of actions that he or she will be perform while also detailing the reason for those actions. With every audit, the business’s management is in charge of handing over the financial statements that the auditor will review; while the auditor will review the statements for any material or immaterial misstatements.

The Model of Trust Enhancement was established to enhance and maintain the public’s trust in the accounting profession. Over the last two decades, the ethics of the accounting profession has been questioned and public trust destabilized, in particular for auditors, due to the Enron debacle. The fact that an auditing firm would assist their clients with publishing an inadequate set of financial statements shows their willingness to violate laws and regulations (Sims & Brinkmann, 2003). According to the textbook, “Because trust is essential, even the appearance of an accountant’s honesty and integrity is important. The auditor, therefore, must not only be trustworthy, but he or she must also appear trustworthy” (Duska, Duska & Ragatz, 2011, p. 116). The majority of statements filed inadequately have a substantial impact on the credibility of the accounting profession as a whole. Sullivan (n.d.10) states that a CPA must possess a high level of trust, by applying professional judgment and enhancing the three trustworthy characteristics (ability, benevolence, and integrity) when resolving accounting ethics dilemmas (slide 3).

The American Institute of Certified Public Accountants (AICPA) has the duty of ensuring CPA’s follow rules and stringent penalties can result if not compliant. A code of ethics is involved and revisions have been made in recent years. The entire ethics provisions apply to members in public practice, business, and other members. Furthermore, the provisions have made the revised code is the creation of three sections for members in diverse areas of practice to assist accounting professionals in each group to determine whether they are in violation of any rules of conduct, (Mintz, 2014). There are tools made for CPA’s to make better ethical decisions to avoid conflicts. For instance, a provision in the prior section explains of violation of honesty and objectivity if a member is coerced into pressure. Since revisions

The successor auditor is the auditor who is considering accepting or has already accepted engagement with the new firm. Communication between the predecessor and the successor is important. This information can bring about many issues such as “the predecessor auditor and the client may have disagreed about accounting principles, auditing procedures, or similarly significant matters” (PCAOBUS.org, 2013). The successor auditor should initiate the communication with the predecessor. The reason behind the successor auditor initiating the communication is to obtain valuable information that can lead to whether or not they should accept the engagement. The successor auditor may only request reasonable information to the predecessor auditor pertaining integrity of management, disagreements in accounting principles, auditing procedures, and or other significant matters. In addition, successor auditor can establish communication with audit committees or other with equivalent authority regarding “fraud, illegal acts by clients, and internal control related matters” (PCAOBUS.org, 2013). There are laws of confidentiality that the predecessor must abide by. The predecessor must maintain confidentiality at all times. Due to this confidentiality laws

Auditors should plan the audit so that the engagement is conducted in an effective manner.

With professions having this tremendous knowledge regarding a company’s financial standing and not being able to disclose the information to the public it can create major investment errors. With these restrictions in place by the AICPA the accountants and auditors “… in a position of having to choose between earning a livelihood or making a proper ethical choice” (Synder, 2011).

What draws me into the field of accountancy? Why do I want to launch a career as a certified public accountant (CPA)? What is there about numbers, spreadsheets, profit and loss statements, audits, inventory and fiduciary responsibility that appeal me? In this paper I will describe in detail the reasons why I am attracted to this field. Also, what are the duties and responsibilities of a CPA? How available are job openings for a person with the education and experience to work as a CPA? How well to companies compensate those hired as CPAs? These questions and issues will be thoroughly reviewed in this paper.