Accountants' Handbook Volume One: Financial Accounting and General Topics, Eleventh Edition

Chapter 28. AUDITING STANDARDS AND AUDIT REPORTS FOR NONPUBLIC COMPANIES

Dan M. Guy, PhD, CPA

Clemson University

Alan J. Winters, PhD, CPA

Clemson University

SERVICES OFFERED BY INDEPENDENT ACCOUNTANTS

(a) CLASSIFICATION OF SERVICES.

The term independent accountant is used interchangeably with "independent auditor" and "independent public accountant." Generally, the term is limited to either certified public accountants (CPAs) or public accountants licensed to perform audits and express opinions on financial statements under applicable state accountancy laws.

Because they are knowledgeable about accounting principles and accounting systems, tax matters, and the like, independent accountants provide a wide range of services in addition to audits. These include accounting and review services, tax services, consulting services, personal financial planning, and other types of special service. The range of their services has recently become contentious.

(b) AUDITING SERVICES.

An audit involves the application of a variety of procedures and techniques to obtain evidential matter sufficient for the independent accountant to express an informed opinion about whether the financial statements conform with generally accepted accounting principles (GAAP). When serving as an auditor, the independent accountant is guided by a Code of Professional Conduct and a variety of standards promulgated by professional bodies established for that purpose.

Rule of Conduct 202 of the American Institute of Certified ...