Discussion:Audit Question

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GFCPA2010 (talk|edits) said:

10 May 2011
Does anyone out there know how many CPA's are needed to perform audit? If I recall from my audit college course, you need at least 2 partners that are CPA's? Anyone need a partner?

Thanks,

Greg

Harry Boscoe (talk|edits) said:

10 May 2011
And three more to turn the chair...

GFCPA2010 (talk|edits) said:

10 May 2011
lol, it's like the start of a funny joke

RoyDaleOne (talk|edits) said:

10 May 2011
I am the only CPA, and only employee in my firm and I do (did) audits. What is the problem? Checklists? lol

Captcook (talk|edits) said:

10 May 2011
My understanding is similar, in that most quality control documents state that all financial statements must be reviewed by a different person than he/she that did the work. This may be able to be accomplished by a staff member, but I'm not sure. I know our firm's (12 CPAs) quality control document requires any attest work accompanied by a report be reviewed by two partners before it is issued. However, I imagine you can structure your QCD to allow for a departure.

GFCPA2010 (talk|edits) said:

10 May 2011
Hmmmmmm, thanks Captcook, much appreciated,


Greg

Szptax (talk|edits) said:

10 May 2011
A solo CPA desiring to perform audits could satisfy the review requirements by outsourcing the review component of the audit. Al least I am told there are small firms that perform audits in this manner. I personally think it takes 2 to do the audit (at least) and another for review.

RoyDaleOne (talk|edits) said:

10 May 2011
Where is that requirement Szptax?

Also, who told you that?

Szptax (talk|edits) said:

10 May 2011
No one exactly, more like the accepted practice of firms where I worked - and college is way too long ago to quote anything reliably! but I know this - that you need enough to have a planning meeting, enough to do the work and to have work reviewed. Different people should be doing different tasks. I am aware of some very small 1 or 2 person firms that outsource some of the steps, particularly the review, and consults in the planning.

RoyDaleOne (talk|edits) said:

11 May 2011
You are correct Szptax, however, that is not required and you now know of three "very small firms" that do not outsource any portion of the audit work.

Szptax (talk|edits) said:

11 May 2011
Actually RoyDaleOne - you are the only one who has posted that claims to perform 100% of the audit engagement as a solo CPA.

RoyDaleOne (talk|edits) said:

11 May 2011
http://www.accountingweb.com/blogs/cpapastr/today039s-world-audits/can-sole-practitioner-meet-quality-control-standards

Here is some reference for you.

RoyDaleOne (talk|edits) said:

11 May 2011
Can we move this to the accounting forum, please?

GFCPA2010 (talk|edits) said:

11 May 2011
Wow Roy, you're good! I can tell you have been in practice for years, it's a pleasure

Greg

Szptax (talk|edits) said:

11 May 2011
Sole Practitioner Checklist:

http://www.aicpa.org/InterestAreas/PeerReview/Resources/PeerReviewProgramManual/2010/DownloadableDocuments/4300.pdf

Peer review requirements: http://www.aicpa.org/InterestAreas/PrivateCompaniesPracticeSection/Resources/PeerReviewQualityControlDocumentGuidance/Pages/default.aspx

Despite its being possible - I don't believe it is recommended, which is why sole firms that I am aware of who perform audits do so on a limited basis (No SEC work etc) and utilize other professionals to insure quality.

Szptax (talk|edits) said:

11 May 2011
And, since AICPA membership isn't required, Peer Review Requirementsdepend upon your state licensing board requirements if you are not a member of the AICPA., It is possible that audit requirements may be similarly regulated since I don't know each state's licensing rules and certain contracts may require the auditor to meet additional requirements.

RoyDaleOne (talk|edits) said:

11 May 2011
SEC Work

http://yahoo.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=1133957&SessionID=6iKRHeQJI-_4gl7

Sure....

Natalie (talk|edits) said:

May 13, 2011
I know of three sole-practitioner CPAs who perform audits. I do not know whether they outsource review of the work. Two of them were partners in other firms and decided to go on their own. The other had about 10 years of experience with a firm before he went on his own.

Fsteincpa (talk|edits) said:

14 May 2011
I also do audits, have done them for 15 years as a solo guy. Non-profit audits with submissions to state and federal authorities. Never had an issue.

Well, state dept did try to blacklist me once. but I beat that. ;-)

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