Question

Identify the functions and importance of CPA firms?

Answer 1

FUNCTIONS OF PUBLIC ACCOUNTING FIRMS

Some of the most common services provided by these firms, or simply, their functions are:

Taxation

Accounting firms also perform external audits and provide services such as Tax compliance. It is the responsibility of the firm to calculate its client's liability. The accountant is aware of its clients' tax compliance requirements. Businesses and people need to pay taxes as part of their responsibilities and accountants can help them with this.

Audit & Assurance - Risk & Financial Advisory

Another service an accounting firm offers is Internal Audit & Risk Management which basically handles cases of theft and fraud. The accountant can advise the business owner on how to re-organize his system, his employees and even its electronic data processing department. This is to protect the business from factors that can bring the business down further.

Assurance involves auditing of the company’s financial data to present a true & fair view.

Financial Advisory is also an important service provided by these firms to their clients in the form of estimates and consulting work related to its future course of action.

Consultancy Services

Business consulting is another function that these firms offer. There are expenditures and decisions that businessmen need some help with, especially when the person is a newbie in business. Not all business owners have knowledge about how to expand how to make their businesses grow.

Operational Book-keeping & Accounting

Its most basic responsibility is to provide a just and accurate report of the client's financial standing. An accountant usually begins with financial record keeping. It is through these documents that an accountant reports the standing of the company.

Specific services to Private Sector

Specialty services may also be offered by the firm. These include short to long-term term engagement providing high class support to the international market. This is the service that companies should get when the business growth is so big that there has to be major changes in the current accounting system so it can continue to work.

Business Development and Valuation

Accounting firms are integral when a business needs to create valuation reports or to obtain audits that financing firms require. When a business seeks a loan or funding from a private investor, this transaction needs to be legitimately and accurately valued. It is also necessary for potential mergers or purchases.

IMPORTANCE OF PUBLIC ACCOUNTING FIRMS

In the business world, accounting firms are the only group of people equipped with the level of knowledge, skills and abilities to carry out various important processes needed by every company or enterprise around the globe.

• They are responsible to maintain the quality of financial reporting and the proper presentation and interpretation of financial data to its users.
• They are the only firms authorised to carry out auditing tasks and tax compliances. The functioning of these firms makes it possible to keep a check on a company’s operations and prevention of errors and frauds.
• They provide a foundation to the entire financial and business model of a company, if are indulged in consulting and advisory services for that particular company.
• Now, looking it from client’s point of view, small or medium companies find it more efficient and cost-saving to outsource there accounting or other stuff to these firms, and thus, focus on more important works such as expansion and decision-making.