...This memo outlines the following questions: What is the methodology used in determining deferred taxes, what is the procedures for reporting accounting changes and error corrections, and what is the rationale behind establishing the subsidiary as a corporation. It will also detail the professional responsibilities of a CPA and what the differences between a review and an audit are. The professional responsibilities of a CPA are to uphold the rules set forth by the State board of Certified Public Accountants, and to conduct ourselves in a manner bound by the rules of the AICPA’s Professional Code of Conduct. They also include: independence, scope of service, confidentiality, practice development, and difference on accounting issues. A CPA at all times should maintain a high level of ethical conduct that goes above and beyond society’s laws. As a CPA we are to keep our professional judgment unbiased and base our opinions on factual information and keep all personal interest separate from the work. CPA’s should keep all client information confidential, and only report information deemed necessary for investors and outside users, as well as determine and discuss with the client and differences in accounting issues that relate to transactions are handled so that they may be resolves in an accurate and timely manner (Schroeder, 2005). The difference between and audit and a review is that an audit provides a basis for an opinion for a company’s financials. A review on the...
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...Memo Date: 5/17/2011 TO: JANE SMITH, MANAGER FROM: ROBIN GEISLER RE: CPA REPORT This memo is in reference to the request that was received to conduct a review on a sister company of a large organization. This subsidiary company is set up as a corporation. It is the responsibility of the CPA to assure that the financial statements are prepared correctly and there are no misstatements or errors. It is also important to ensure that all information concerning the corporation in question is kept safe and secure. The performance of this corporation needs to be review to ensure that it is managed effectively and that everything is running efficiently. This request is a review of the corporation in question and not an audit. An audit is conducted to determine if the financial statements are correctly prepared and present fair and accurate information. Tests are conducted in an audit to detect if fraud has been committed and to evaluate the effective use of internal control. Supporting documentation is sometimes provided to prove and verify information within the financial statements. A review is different in several ways. A review does not always take the whole company into consideration. Usually a review will focus on a certain area of the company and provide an opinion on just those areas. For example, in this request the CPA’s of the large organization want information on one of their subsidiaries. Their concerns rest in the area of deferred taxes and reporting and...
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...Memo on My Responsibilities I will be auditing publicly traded company, known as “fictitious corporation” from this point forward. I will evaluate fictitious corporation to ensure the company reporting is consistent with the Generally Accepted Accounting Principles (GAAP). In addition, I will evaluate the company to ensure their methodology is acceptable for determining deferred taxes and that their procedures for reporting accounting changes and/or error corrections is being carried out correctly. Lastly I will audit fictitious corporation to ensure that the company’s rationale behind establishing one of their newer subsidiaries as a corporation. Methodology for determining deferred taxes We will look to see how the company is treating their deferred taxes and which methodology they should be using. The company should be determining deferred taxes based on the prior year’s difference between income tax expense and its income tax payable. It is important that there will be differences that arise between fictitious corporation’s income tax expense and income tax payable as this company uses the full accrual method for financial reporting but when looking at taxes they are evaluating based on a modified cash basis. Procedures for reporting accounting changes/error corrections We will look to see how fictitious corporation is reporting their accounting changes. We are also intending to look at any error correction to ensure they were handled appropriately as well...
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...Abstract This paper is on the based on ethical issues in financial accounting, I picked this subject because I believe that having good morals and ethics is the mainstay of life in general, But in finance and accounting it is very important to have this to be successful in business, which is based on personal, professional and corporate issues that will arise in day to day operation. Introduction Accounting is the profession of Analyzing, collection, recording and posting financial transactions in a manner to provide useful information essential to making financial decisions by leaders in a business or organization. Accounting is also called the language of business. The financial statements are used to communicate the effects of the operation and financial strength of a business or organization. By making comparisons of statements from a company from year to year, a professional could be able to predict the profitability, direction and financial condition of a business or organization (Juan, 2007). It is important that the accounting practice is immune to greed and selfishness, and should be a free emotional reporting function which requires a skillset to handle complex technical skills but have no moral involvement. People think on most financial issues or scandals are problems of disloyalty and distrust (Senaratne, 2011). Can we trust those who run the finances in today’s world? Can Accountants, auditors, bankers can be trusted? Yet when an issue is not...
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...Act Answer to Question No. 1 As the conclusion of where I will join college next year rapidly advanced, I decided to enquire the foremost I have selected, Accounting. Because my aim is to become a declared Public Accountant (CPA), I would like to understand more of what it entails. considering with figures, and notes and projecting the profits of a business, accountants are put with the blame of keeping track of the moneys of a business. God has blessed me with abilities in the areas of numbers and association, which initiated me to gaze for an occupation that utilizes both. Accounting appeared a logical alternative since they largely work with numbers and coordinate their clients' money. In alignment to become a CPA, one must obtain a bachelor's degree and work for a prescribed number of hours for a peak accounting firm. Covering a broad spectrum of enterprise associated specialization, accountants and those who proceed as auditors must be adept to determine whether or not a company is utilising their assets efficiently and if they are rightly recording the moneys they come in communicate with. I am cognizant that accountants work with cash and the documenting of it but would like to ascertain exactly what additional the job of a CPA comprises of. Answer to Question No. 2 Since the latest worsening of the American finances and job market, I began to ponder how very simple it would be to attain a job as an accountant. According to Steve French, an accountant for...
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...ShaSha Lei How Psychology Affect My Career Decisions Our career choices are shaped by the personal interest and environment in our lives. This research paper will discuss how interest and environment influenced my career decisions throughout the years. Become a Magician, Veterinarian, Psychologist and Accountant are some of various my career selections in the past 18 years. My early childhood career selection was to become a Magician. Why would I want to become a Magician? Because I read a book called “Charlie and the Chocolate Factory” and I was attracted by those fancy events. In the book, Mr. Wonka has the biggest candy factory in the world, and he can turn impossible things into possible situations. I always thought it would be great if I can have the same ability as him. My career decisions became more realistic while in Middle School and the High School. When I was in Middle School, I wanted to become a Veterinarian after I got my first puppy. I love dogs, and I want to make Veterinarian profession my future career. I found some information about Veterinarians in “Wiki Answers”, which indicates that “Veterinarian are required to study a Biology related major and must graduate with a Doctor of Veterinary Medicine degree from a 6 year program at an accredited college (http://wiki.answers.com). After I saw this reference website; I choose to abandon this career choice because Science is not my favor subject. After Middle School, in High...
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...Time estimates for the questions are based on a three-hour examination. Candidates are responsible for managing the time allocation between the objective-format portion and the case portion as it will not be controlled as part of the examination. Until otherwise advised, for the Elective examinations, candidates can expect two cases for a total of 150 minutes, where the maximum time for any one case is 90 minutes and the minimum is 60 minutes. Candidates will be advised if and when the cases begin to exceed 90 minutes. Chartered Professional Accountants of Canada, CPA Canada, CPA are trademarks and/or certification marks of the Chartered Professional Accountants of Canada. © 2015, Chartered Professional Accountants of Canada. All Rights Reserved. Elective Modules Blueprint – Jan 2015 update FOR THE OBJECTIVE-FORMAT PORTION: ASSURANCE ELECTIVE COMPETENCY AREA WEIGHTINGS CPA Competency Range 1. Financial Reporting 20-40% 2. Strategy & Governance 0-10% 4. Assurance 50-70% 5. Finance 0-10% The objective-format questions will...
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...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory JoinSearchBrowseSaved Papers Home Page » Business and Management Memo to Manager In: Business and Management Memo to Manager Memo Date: March 22, 2010 To: Andre Adams, Program Coordinator of the TerpZone * From: * Adedoyin Ogunbajo, Tournament Coordinator, the TerpZone Subject: Proposal to implement a sign-up fee for all video game tournaments. Purpose The purpose of this proposal is to request your approval to evaluate the current video game tournament sign-up process and ultimately institute an entrance fee for all tournaments starting next semester. Summary When the TerpZone started running the video game tournament series, I personally did not know what to expect, as I was in charge of coming up with a schedule of games, implementing the schedule into the TerpZone calendar, coming up with various ideas to market the various tounrmanents, and actually hosting and running the tournaments. But as the results have shown, the TerpZone video game tournament series has been a huge success, and the attendance numbers have steadily increased as more students become aware of the possibilities that our tournaments offer. However, as this number has continued to increase and I have continued to implement different new strategies and additions to the tournaments, there still lies the problem of what measure of compensation the students...
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...CPA Report This memo has been prepared in response to Mr. Butterworth’s inquiry on behalf of the independent audit team reviewing XYZ Corporation, a wholly owned subsidiary of ABC Company. Specifically this memo addressed the methodology used to determine deferred taxes, the procedure for reporting accounting changes and error corrections, and the rationale behind establishing XYZ Corporation as a subsidiary. Also included in this memo, as requested, is a discussion of the responsibilities of a CPA, and the differences between a financial review report and a financial audit report. Methodology used to Determine Deferred Taxes Deferred taxes can be one of two different types of deferred tax entries, permanent or temporary. Permanent deferred tax liabilities are income generating events that do not incur tax liabilities, and thus a permanent adjustment to the financial reports is made to adjust for the discrepancy between income for tax purposes, and income for reporting purposes. A temporary deferred tax liability is a liability where taxable income is different from reportable income, but at some future point, the taxable income will reconcile to the reportable income (Kieso, Weygandt, & Warfield, 2007). Temporary deferred tax liabilities can result in either an excessive or insufficient amount of tax withheld in the current period, which will be reconciled at a later period. An example is the depreciation of a capital asset. If the book depreciation of a...
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...Accounting and Communication: Final Project I plan on graduating from Temple with a bachelors in science in Accounting. Afterward, I desire to enroll in Graduate school at Temple University to complete my Masters degree. Hoping I will be skilled enough (CPA test preparatory classes may be necessary) to pass the CPA (Certified Public Accountants) exam, I intend to apply to a private accounting firm. In order for an Accountant to internally do their job correct, they need to ensure that firms are efficiently run financially while also making business decisions that would lead to prevented loss/future profit. They prepare, analyze and verify financial documents that are recorded in an accounting journal, balance sheet, income statement, statement of cash flows and shareholders’ equity. Externally, an Accountant could be employed by a public corporation and sent out to off-premise locations to perform audits. The duties of an accountant depend on whether they are a private or public accountant and which department they work in. Public accounting for the most part has to do with auditing, taxation, and external duties. Private accountants are more internal and deal with budgeting, inventory, cost accounting and internal auditing. In 2009, the median annual wage for accountants and auditors was $60,340, according to the Bureau of Labor Statistics. Personally, I like the internal work that has to do with financial accounting, not managerial accounting. I’m more of a numbers type of...
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...CPA Report Michelle Richardson ACC/545 Internal Control Systems September 10, 2012 Jeffrey Mitchell Memo Accounting Professionals, Inc. To: Management From: Michelle Richardson CC: Jeffrey Mitchell Date: September 10, 2012 RE: CPA Report ________________________________________________________________________ Per your request, this memo provides explanations regarding a subsidiary that has recently been set up as a corporation. This explanation includes the procedures for reporting accounting changes and error corrections, the methodology used to determine deferred taxes, and the rationale for establishing the subsidiary as a corporation. According to the AICPA (2012), “licensed CPAs are subject to regulation by their respective state boards of accountancy and strict professional ethics rules adopted by the boards to protect the public against fraud, incompetence and conflicts of interest” (para. 1). As such, the responses to the outside CPA’s in regard to the above-mentioned matters will be handled with the utmost diligence. In addition, to clarify the questions regarding the differences between reviews and audits, an audit is the “accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria” (Arens, Elder, & Beasley, 2006, p. 19). Reviews, on the other hand, are a “form of attestation in which a CPA firm issues a written report concerning historical...
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...Memo To: Outside CPA From: CC: Manager Date: April 25, 2011 Re: CPA Report Below I have summarized an explanation to the questions that came about during your examination of a subsidiary that has been set up as a corporation. • The methodology used to determine deferred taxes. The deferred taxes reported are a temporary difference. The deferred taxes were calculated based on what needed to be reported versus what has been posted to the corporations’ books. The “temporary difference is the difference between the tax basis of an asset or liability and its reported (carrying or book) amount in the financial statements, which will result in taxable amounts or deductible amounts in future years” (Kieso, el. 2007, Ch. 19). The corporation has taken the balance sheet approach to account for this timing issue and SFAS 109 guidelines have been followed. • The procedures for reporting accounting changes and error corrections. According to Kieso, Weygandt, and Warfield (2007, Ch. 22), and the Financial Accounting Standards Board [FASB], reporting accounting changes should be done using the retrospective approach. The retrospective approach reflects the changes done in previous financial statements so that they are more comparable. To report these changes first the corporation adjusts each prior period financial statements and then the corporation “adjusts the carrying amounts of assets and liabilities as of the beginning of the first year presented”...
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...Examination & Forensic Accounting Amanda Capó Rosselló Certified Public Accountant/ Accredited in Business Valuation/ Certified in Financial Forensics/ Chartered Global Management Accountant Certified Valuation Analyst Certified Fraud Examiner Evaluadora Neutral Certificada Mediadora Certificada www.amandacapo.com Amanda Capó Rosselló CPA/ABV/CFF/CGMA, CFE, CVA, MC, AC, ENC 9 octubre 2014 1 ¿Qué son procedimientos forenses? Los procedimientos forenses envuelven la recopilación sistemática de evidencia a través de reconocidas técnicas investigativas que pueden ser presentadas en un Tribunal. 9 octubre 2014 Amanda Capó Rosselló CPA/ABV/CFF/CGMA, CFE, CVA, MC, AC, ENC 2 ¿Qué son procedimientos de contabilidad forenses? Los procedimientos de contabilidad forense son las Herramientas que envuelven la aplicación de destrezas especiales en contabilidad, auditoría, finanzas, estadísticas, áreas legales y de búsqueda además de destrezas investigativa para recopilar, analizar y evaluar evidencia para luego interpretar y comunicar los hallazgos. 9 octubre 2014 Amanda Capó Rosselló CPA/ABV/CFF/CGMA, CFE, CVA, MC, AC, ENC 3 El Código de Conducta www.AICPA.org Forensic Accounting Services For purposes of this interpretation, forensic accounting services fn 25 are nonattest services that involve the application of special skills in accounting, auditing, finance, quantitative methods and certain areas of the law, and research...
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...CPA Report ACCT 545 Deborah Asbury CPA Report Memo To: Outside CPAs From: Date: April 13, 2014 Re: CPA Report In response to the examination of the subsidiary that has been set up as a corporation, the explanations to the deferred tax methods, procedures for accounting changes and corrections, and the reasoning for setting up the corporation as a subsidiary will be addressed in the following memo. Deferred Tax Method Financial reporting and tax reporting create temporary differences between the amounts reported for income taxes and on the financial statements because an accrual basis is used for financial reporting and a modified cash basis is used for tax reporting. Deferred taxes reported contain a temporary difference between the tax basis of a liability or asset and its reported amount in the financial statements that will result in taxable or deductible amounts reporting years. Deferred tax liabilities and assets are recognized on the balance sheet based on the difference between the financial statement values and the tax basis (Kieso, Weygandt, & Warfield, 2007). The balance sheet approach and the guidelines of the Financial Accounting Standards (FAS No. 109) have been followed to account for this timing issue. Deferred tax assets are recorded when there are greater expenses for financial reporting than tax reporting. At some point the tax amount paid to the Internal Revenue Service (IRS) will be higher than the tax on the financial statements. Deferred...
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...CPA Report Dawn Rouse ACC545 December 9, 2013 Jeffrey Mitchell CPA Report INTERNAL MEMO TO: Management FROM: Dawn Rouse, CPA RE: CPA Report ------------------------------------------------- DATE: December 9, 2013 ------------------------------------------------- I’m writing to let give you the rough draft of the information that I will provide to the CPAs in response to their questions about the subsidiary. You will find my responses to their questions along with the information you request regarding the responsibilities of a CPA and the differences between a review and an audit. US GAAP (SFAS 109) requires deferred taxes to be computed under the liability method. This method states that deferred tax assets and liabilities are recognized when there is a temporary difference between the stated value of an asset or liability for tax purposes and the value for financial reporting purposes. Deferred tax is contingent on future revenue and income being sufficient to offset the deferred tax. When an asset’s carrying value exceeds its tax basis the result is deferred tax and when it is less it is considered a tax asset. When a liability’s carrying value exceeds its tax basis, the result is a tax asset and when it is less it’s a tax liability. SFAS 154 requires “retrospective application” for any voluntary changes in accounting principles. Restating comparative financial statements to show the new method as if it had been applied the whole time is retrospective...
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