1.8 Other Services Performed by CPAs

In addition to audit, attest, and assurance services, CPAs perform many other important and valuable services for their clients. One type of service that is most commonly recognized by the general public is taxes. CPAs provide many types of tax services, including income tax return preparation for both businesses and individuals, tax planning, and representing clients before governmental agencies. In addition, some CPAs who possess a strong understanding of tax laws and regulations provide valuable personal financial planning services to clients.

Other common services provided by CPAs include compilations and reviews of clients’ financial statements. A compilation is a collection of the client’s data used to assemble financial statements. When completing a compilation engagement, the auditor reads the completed financial statements for obvious flaws (AR-C Section 80), but she does not provide any assurance that the financial statements are presented fairly in accordance with the relevant financial reporting framework. Reviews of financial statements are services in which the CPA performs an abbreviated set of procedures to provide “limited assurance as a basis for reporting whether the accountant is aware of any material modifications that should be made to the to the financial statements for them to be in accordance with the applicable financial reporting framework, primarily through the performance of inquiry and analytical procedures” (AR-C Section 90). The most common basic procedures performed as part of a review include inquiring of management regarding material matters and performing high-level analyses of reported financial information. In a review engagement, the auditor provides limited assurance (described in greater detail in Topic 15) regarding the financial statements because the scope of the work performed does not generate sufficient appropriate evidence required to provide reasonable assurance regarding the fairness of the financial statements.

In addition to the types of services discussed in this topic, CPAs provide a variety of other services, such as litigation support, business consulting, asset or business valuation, and financial information system design and implementation. While a detailed discussion of each of these services is outside of the scope of this text, it is important to understand the important and diverse role CPAs play in assisting clients by providing a wide variety of valuable services.