February 27, 2017 Tax File Memorandum FROM: Derrek Mason SUBJECT: Shelly Zumaya and Kiwi Corporation Tax Liability FACTS: Shelly Zumaya is the president and sole shareholder of Kiwi Corporation (stock basis of $400,000). Kiwi Corporation, incorporated in 2003, is in the business of purchasing and reselling used farming equipment. In December 2012, Kiwi transferred its entire inventory (basis of $1.2 million) to Shelly Zumaya in a transaction that was recorded as a sale.
This includes; implementing and maintaining financial control procedures, planning, supervising, offering specialized Advice, obtaining sufficient data, and financial compliance (Petrick, 2016). A CPA’s responsibilities in regards to audit engagements include; planning, testing of controls, substantiation or fieldwork and exit or finalization. The first step in this process is notifying the client that an audit is about to take place. The Auditor will then, gather information to understand the organization, review and evaluate internal control procedures, confirm major transactions and balances and test underlying accounting records (Renitra, 2000). The differences in a CPA’s professional responsibility for consulting engagement and audit engagement is that an consulting engagement focuses one a specific area of an organization whereas an audit engagement focuses on the entire
ACC 201 Final Project Part I Accounting Cycle Report Vanessa Ann Williams Southern New Hampshire University The accountant cycle has really impacted me to gain insight on the financial side of Peyton Company. In the accountant cycle, there are many particular directions involve determining the growth of the company such as steps, role, omission and financial statements. It’s important to apply every step from the accountant cycle to make a financial critical decision in the long run. This report will have a breakdown of how to apply the accountant cycle for Peyton Company to be aware of future financial decisions to keep the company holding strong.
Keller CPA has been asked to audit this dog manufacturing company. Since this company started as family owned business and quickly grew, the sister’s did not have much experience in understanding the accounting principles or in understanding the importance of having internal controls. In order for the business to continue to grow, there needs to be some changes to the way they operate. Smackey Dog Foods has made an important first step by hiring a CPA firm to conduct an audit of their financial statements. The Securities and Exchange Commission can have a pretty big influence on the audit of Smackey Dog Foods, Inc.
Under a research concerning the incorporation of public accounting, researchers have found articles related to it. AICPA once opposed in the incorporation of public accounting in reasons that it may fall under the management of non-accountants. (The CPA Journal Online) When Rule 505 of Code of professional Conduct was already existing (Practice of Professional Corporation), issues arises about the protection of an accountant as shareholder in the corporation. On October 1990, the Council of the AICPA amend Rule 505 of the AICPA Code of Professional Ethics to make it possible for CPAs to practice as "limited liability corporations.
A financial audit is an independent, objective evaluation of an organization 's financial reports and financial reporting processes. The primary purpose for financial audits is to give stakeholders reasonable assurance that financial statements are accurate and complete. Most internal audits are not adding value. One reason is that “ongoing compliance burdens and pressure to do more with less” is contributing to the decline in perceived internal audit value.
1.Advise Shania on which of the business forms under consideration best accomplishes her business goals. Thoroughly explain the reasons for your recommendation. Shania Jackson is a Christian entrepreneur and she wants to open a Christian Coffeehouse near the Denver, Colorado area. Her husband, Marvin, is willing to participate in the form of capital to the business but has no interest in participating in its operation or management. Knowing this, I believe a limited liability company (LLC) would be the best for Shania’s business goals.
Another advantage was the creation of The Public Company Accounting Oversight Board (PCAOB), whom oversees the audits of broker dealers and public companies. In light of the strict regulations, corporations have become more conscious of corporate social responsibility and doing the right thing. Many companies in the private sector even began to adopt some of the policy’s, such as the whistleblower program, “best practices,” and strengthening their ethics and conduct
In the article Accountants Save the World by Peter Bakker, one of his casual claims is that “to address current economic crises in a systematic way, we must begin to demand a return on social and natural capital as well. ”1 As a result, Bakker felt that shareholders would not recognize a company's' social accomplishments if it is not captured in financial reports. However, it could be that shareholders do not put social capital into financial statements because they believe that the only social responsibility of business is profits, like Milton Friedman. Therefore, demanding a return on social and natural capital would be ineffective if the majority of shareholders agree with Friedman's view.
The CPA Horizons 2025 is a road to the future and it is a major step in the right direction by AICPA. The initiative has been on going for about a year and the professional body has come up with ideas on what’s the new big thing for CPAs to focus on and the accounting profession as a whole. CPA Horizons 2025 brings about insights from more than 75,000 comments from CPAs from all sectors of the accounting profession and to discuss what is at stake and challenges that will be faced in the years leading to 2025. The most important thing about the Horizons 2025 is that initiatives are developed with regards to the direction and challenges that will be encountered in the future. There are key findings and agreement made as to the direction and where the future of the accounting profession lies.
In modern day America, a reoccurring problem is the decision on whether or not to require financial literacy classes for graduation in high schools. As of 2009, only three states required students to take a semester-long financial literacy class to graduate, while seventeen other states incorporated financial literacy in to other subjects, such as economics. Many people argue that without the class, students are left to struggle on their own financially. As a result, financial literacy classes should be enforced to better America’s economy as a whole. Research has shown that there are many advantages and disadvantages associated with taking a financial literacy class.
In D.C. Burns and W. J. Haga’s article, “Much Ado About Professionalism: A Second Look at Accounting” the authors describe two items they believe must be present for an occupation to be considered a genuine profession. Burns and Haga state that an occupation is considered a genuine profession if it contains cruciality and mystique. The authors go on in their article to argue that due to the lack of these two items certified management accounts (CMAs) are not genuine professionals. Burns and Haga states that an occupation possesses cruciality when a significant group recognizes the occupation as being necessary to their survival. The authors argue that CMAs do not possess cruciality due to the ability of certified public accountants (CPAs) to perform the functions of CMAs.
An accounting memo should be a one-stop shop when it comes to forming a conclusion on an accounting issue. A company would reference an accounting memo to gather information regarding the transaction, accounting evaluation, and reason the position was taken on a problem or issue. The five critical components are listed below as a guide to prepare a professional accounting memo. I. Facts & Background • This section of a research memo is used to describe all the relevant background information to fully comprehend the needs of the transaction and the accounting behind it. •
What do pro forma financial statements show? There are various things Pro forma financial statement shows but first, let’s understand the word pro forma which means a financial statement based on projection and assumption of what the business future would be to determine what should be happening now. Pro forma financial statement can be thought of as a “Projected results for financial statements in the future, given assumptions about what will happen in the meantime” (Siegel & Yacht, 2009, p. 81).
It also requires that all members of audit, compensation and nominating or governance committees should be independent and also that at least one member of the audit committee must have accounting expertise. These regulations also impose stricter supervision over outside auditors for proper auditing
