Understanding accounting and auditing is key to becoming an outstanding CPA. There's no way around it. If you want to be a great accountant or auditor, you have to keep up with the ever-changing accounting and auditing landscape. And believe me, it's always changing.
Being an excellent accountant or auditor requires knowledge in:
Accounting standards primarily come from the Financial Accounting Standards Board (FASB) and the Governmental Accounting Standards Board (GASB). Other types of reporting frameworks include cash-basis, modified-cash basis, tax-basis, contractual, and regulatory. An accounting framework is used to create financial statements. The selection of the reporting framework is based on legal and regulatory requirements we well as the needs of users.
Once financial statements are created, they may be subject to attest procedures performed by a third-party CPA or CPA firm. Possibilities include a compilation engagement, a review engagement or an audit.
Many accountants are not auditors, but some are.
Auditing is the inspection of accounting records, usually financial statements, by a third party CPA or CPA firm. The standards for auditing U.S. entities primarily come from the Association of International Certified Professional Accountants (AICPA) and are called Statements on Auditing Standards (SASs). Additionally, the AICPA provides attestation standards in the form of Statements on Standards for Attestation Engagments (SSAEs). Whether the SASs or SSAEs are used, the accountant--as an independent third party--uses these standards to add credibility to the information by rendering a opinion or report about the subject matter.
Auditors must understand accounting and audit standards.
Below are articles about FASB and GASB standards.
Below are articles about auditing and attesation standards.
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