List and describe the three factors that influence the organizational structure of all CPA firms. What are the most common forms of CPA firm organization?
What will be an ideal response?
The three factors that influence the organization of a CPA firm include:
1. The need for independence from clients. Independence permits auditors to remain unbiased in drawing conclusions about the financial statements.
2. The importance of a structure to encourage competence. Competency permits auditors to conduct audits and perform other services effectively and efficiently.
3. The increased litigation risk faced by auditors. Audit firms continue to experience increases in litigation-related costs. Some organizational structures afford a degree of protection to individual firm members.
Common forms of audit firm organization include:
• Proprietorship
• General Partnership
• General Corporation
• Professional Corporation
• Limited Liability Company
• Limited Liability Partnership
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Which of the following is not a characteristic of professions or professionals?
A) mandatory university educational training before licensing, as well as continuing education requirements B) licensing-examination requirements C) a formal association or group that meets regularly D) strict, unexamined adherence to the ideology of one political party
The multiple-server system models have been developed on the assumption that the service times are normally distributed
Indicate whether this statement is true or false.