Small business and the CPA: a guide to written communications

Article Abstract:

The four basic letters exchanged between CPAs and their small business clients are: (1) engagement, (2) representation, (3) management, and (4) legal letters. CPAs provide engagement letters, which outline each party's contractual responsibilities, and management letters, which detail weaknesses in internal accounting controls observed during the audit. The small business client prepares the letter of representation, confirming statements made to the CPA about financial matters and verifying that all known financial irregularities have been disclosed. A legal letter requests the small business firm's legal counsel to list and assess litigations and claims that could affect the audit client's results of operations. Clarity and candor are requisite for all communications between CPAs and their small business clients.

Analysis, Usage, Reports, Business communication, Business letters, Commercial correspondence

---

Independence and the role of the CPA

Article Abstract:

Accountants who audit financial statements have a responsibility to remain independent. Accountant independence 'in fact' means having neither direct financial interest nor a material indirect interest in the client, such as ownership or commitment to acquire any client equity or debt. Independence 'in appearance' means that the auditor's words and actions must give the impression of her or his independence. Certified public accountants may not accept contingent fees for any type of work. The Securities and Exchange Commission, the Institute of Internal Auditors, the Internal Revenue Service, and the American Institute of Certified Public Accountants all have definitions of audit independence that may affect accounting practices.

Standards, Ethical aspects, Autonomy, Autonomy (Political science), Professions

---

Using internal controls in small business

Article Abstract:

Business auditors have devoted more time in recent years to examining the internal controls of the accounting system being audited, and less time performing extensive tests of balance sheet data. The internal controls of the accounting system involve the segregation of record-keeping duties in order to assure the reliability of financial records and the safeguarding of assets. This segregation of duties is sometimes difficult to achieve in the case of a small business, but it can be achieved if the owner is involved in processing transactions. The business owner should evaluate the auditor's recommendations carefully and add procedures for improved internal control as needed.

Methods, Management, Entrepreneurship, Controllers (Persons), Controllers (Accounting)

Similar abstracts:

• Abstracts: Business and the moral maze. Elementary, my dear Watson. We must run the risk
• Abstracts: A theoretical examination of the market reaction to auditors' qualifications. Evidence about auditor-client management negotiation concerning client's financial reporting
• Abstracts: Trading mechanisms and stock returns: an empirical investigation. Liquidity, maturity, and the yields on U.S. Treasury securities
• Abstracts: A different sameness expected in next two years. Auto adjustments ending with no recession in sight. Sluggish economic growth to continue two more years

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.