There are different types of services that are being offered by accounting firms. The scope of the services rendered by accounting firms varies in accordance with their knowledge, expertise and experiences. Some of the common services are the preparation of final accounts, external auditing, tax services, managerial advisory service, and accounting system design.
External Auditing is one of the primary services offered by accounting firms. This primarily centers on the critical examination of financial statements by an independent CPA (Certified Public Accountant) for the purpose of expressing an opinion regarding the fairness of the contents of the financial statements. Instead, the CPA reviews samples of records statistically. Then, the CPA makes an audit report. This report is essentially a formal opinion or disclaimer, issued by the auditor as a result of the audit or evaluation he or she performed. It is to be noted however, that this does not include all of the accounting records being evaluated.
Independence must be maintained by the auditor. Hence, he or she should not be an employee of the client company. It is very important for the external auditor to know the different provisions concerning the independence of an auditor. Otherwise, the audit opinion will be questionable.
Also, accounting firms handle various tax services. The accountant prepares the clients’ income tax return (ITR), business and transfer taxes. In this set up, the accountant represents the client in tax assessment and investigations. It is necessary that tax accountants are constantly aware of the dynamic tax laws, BIR regulations and local tax laws affecting their client, in order for the tax accountant to give sound advice regarding tax minimization. Also, knowledge on the tax provisions serves as a guide for tax accountants in preparing the income tax returns of their clients, and other information being submitted to the concerned offices like the Bureau of Internal Revenue.
Managerial Advisory Services:
Likewise, an accounting firm may also provide Managerial Advisory Services. Managerial Advisory Services help in providing assistance to the management. Generally, accountants provide industrial advice to their clients regarding finance, budgeting, business policies, and organization procedures, systems, product costs, distribution and other business activities.
Budgeting covers the efficient management of cash by anticipating or predicting monetary objectives in the future periods. Periodically, the accountant reviews the actual flow of cash as compared to what it should have been. The differences then are analyzed carefully by the management to determine the possible causes, whether this is a favorable or unfavorable scenario, and how it can be controlled. The reason why such analysis is being done is to improve the accuracy of projections and to narrow the gap between the budgeted and actual performance.
Accounting System Design:
An accounting firm may also render Accounting System Design services. This includes the evaluation of the company’s control system to find out any area/s of improvement. An accountant who works as a system analyst is the one who also designs the accounting forms and installs accounting procedures for the accumulation of accounting data. It may also include the setting up of a customized computerized accounting system for the client’s firm.
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