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The Public Accounting Profession

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13 views

The Public Accounting Profession

Uploaded by

rismayantimaya2610
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The Public Accounting Profession

In recognition of the public trust afforded to public accountants, each state recognizes public
accountancy as a profession and issues the certificate of certified public accountant (CPA). The CPA
certificate is a symbol of technical competence. This official recognition by the state is comparable to
that accorded to the legal, medical, and other professions. The licensing of CPAs by the states
reflects a belief that the public interest will be protected by an official identification of competent
professional accountants who offer their services to the public. Although CPAs provide various types
of tax, consulting, and accounting services that are also provided by non-CPAs, the various states
generally restrict the performance of audits of financial statements to CPAs. It is this performance of
the attest function on financial statements that is most unique to CPAs.

The American Institute of Certified Public Accountants (AICPA) is a voluntary national organization of
more than 418,000 members. The following four major areas of the AICPA’s work are of particular
interest to students of auditing:

1. Establishing standards and rules to guide CPAs in their conduct of professional services.

2. Carrying on a program of research and publication.

3. Promoting continuing professional education.

4. Contributing to the profession’s self-regulation.

Establishing Standards The AICPA has assigned to its Auditing Standards Board (ASB) responsibility
for establishing auditing standards for nonpublic organizations. A most important series of
pronouncements on auditing by the Auditing Standards Board is entitled Statements on Auditing
Standards (SASs). The codification of the AICPA standards is presented in the text’s Appendix:
Auditing, Attestation and Ethical Standards. The preface AU-C is used to cite a particular section.
Thus, for example, AU-C 300 addresses “Planning the Audit.” The AICPA also issues Statements on
Standards for Attestation Engagements (SSAEs). These statements provide CPAs with guidance for
attesting to information other than financial statements, such as financial forecasts. Chapter 2 also
provides a description of the SSAEs. The Accounting and Review Services Committee of the AICPA
establishes standards for reporting on financial statements when the CPAs’ role is to compile or
review the financial statements rather than to perform an audit. The series of pronouncements by
this committee is called Statements on Standards for Accounting and Review Services (SSARS). The
SSARSs provide guidance for the many sensitive situations in which a public accounting firm is in
some way associated with the financial statements of a nonpublic company and, therefore, needs to
make clear the extent of the responsibility that the public accounting firm assumes for the fairness
of the statements. SSARSs engagements are discussed more fully in Chapter 19.

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