Memo
To: Outside CPA
From:
CC: Manager
Date: April 25, 2011
Re: CPA Report
Below I have summarized an explanation to the questions that came about during your examination of a subsidiary that has been set up as a corporation.
• The methodology used to determine deferred taxes.
The deferred taxes reported are a temporary difference. The deferred taxes were calculated based on what needed to be reported versus what has been posted to the corporations’ books. The “temporary difference is the difference between the tax basis of an asset or liability and its reported (carrying or book) amount in the financial statements, which will result in taxable amounts or deductible amounts in future years” (Kieso, el. 2007,
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The corporation and stockholders have the tax burden in a corporation. In whole, from the owners’ point of view, it is more sensible to form a corporation that has a little more flexibility and less liability versus a partnership or sole proprietorship.
References
Bline, D. M., Fischer, M. L., and Skekel, T. D. (2004) Advanced Accounting. Hoboken, NJ: Wiley.
Kieso, D. E., Weygandt, J. J. and Warfield, T. D. (2007). Intermediate Accounting. (12th ed.). Hoboken, NJ: Wiley.
Memo
To: Manager
From: Rebecca Carver
Date: April 25, 2011
Re: CPA Report
As stated by Schroeder, el. (2005), my professional responsibilities as a CPA include independence, scope of services, confidentiality, practice development, and differences on accounting issues. It is my responsibility to keep my professional judgment unbiased and base my opinions on factual information and to keep my personal interest separate from the clients work. It is my responsibility not to indulge any client with nonaudit services not relating to the financial audit. It is my responsibility to keep the clients information confidential and only report information that is deemed necessary for investors and outside users. It is my responsibility to not enter in to any advertisement that would be misleading or untrue. It is my responsibility to determine and discuss with the client any differences in accounting issues that related to how transactions are
Romney, M., & Steinbart, P. (2012). Accounting information systems. (12th ed., p. 143). Upper Saddle River, NJ: Prentice Hall.
The organizational forms a company might have as it evolves from a start-up to a major corporation are: sole proprietorships, partnerships and corporations. The advantages of a sole proprietorship are that is is easily and inexpensively formed; is subject to few government regulations and it’s income is not
* Hold a baccalaureate or higher degree from a board-recognized United States college or university, or an equivalent degree.
Edmonds, T., Tsay, B., & Olds, P. (2011). Fundamental Managerial Accounting Concepts (6th ed.). New York, NY: McGraw-Hill/Irwin.
Hilton, R. (2011). Managerial accounting: Creating value in a dynamic business environment (9th Ed.). McGraw-Hill. Hardcover ISBN: 9780073526928.
The course is designed to allow individuals who do not prepare accounting and financial documents to understand and use these documents as tools in effective managerial decision-making, control and planning. Topics include purposes of financial statements, analysis of financial statements using basic accounting concepts, budgeting, and financial accountability in an organization
9781435463509, Payroll Accounting, 2012 Edition, Bernard J. Bieg - © Cengage Learning. All rights reserved. No distribution allowed without express authorization
As a final year accounting student, there are a few issues, which have broadened my knowledge of accounting while undertaking ACF2100. Such topics include 1) Deferred Tax and 2) The Importance of Presentations in the Accounting Field. These issues will ultimately contribute to how I practice as an accountant.
Before any information can be given to outside CPA’s, the professional responsibilities of a CPA must be outlined and understood as well as what the differences between a review and an audit are. With the examination of a subsidiary that has been established as a corporation there are certain questions that arise such as: What is the methodology used in determining deferred taxes, What it t he procedures for reporting accounting changes and error corrections, and What is the rationale behind establishing the subsidiary as a corporation. The draft below outlines my response to the questions that have been
Kimmel, P. D., Weygandt, J. J., & Kieso, D. E. (2013). Financial accounting: Tools for
There are different types of business ownership. Sole proprietorship, partnership and limited companies are such ownerships which has their own advantages and disadvantages.
Liability Protection: One of the most important reasons for forming a corporation is the limited liability protection provided to its owners. Corporations are separate legal entities from the people who own them, therefore Shareholders are prevented, and would not loose personal assets due to a company's debts or legal issues.
With any option you decide there will be downfalls, major and minor. The main minor downfalls of a corporation include the expense and time it takes to get started. A major downfall, in the eyes of someone considering this form of operation would be the fact that profits are taxed twice. The forms and applications to become a corporation could become lengthy. As far as the taxes
In this text, I discuss a number of accounting concepts and terms. In so doing, I also explain the accounting equation and the various accounts that belong to each component of the equation. Further, I point out those considered the key audience of financial statements as well as other groups who may be interested in the information contained in financial statements.
The abovementioned has been arranged in two parts on the same document, first Question 1 then Question 2 follows below that: