The Difference Between Certification Services And Non Accreditation Services

The so-called forensic business is the CPA's evaluation of an object (such as historical financial statements, non-financial information, etc.) at all.

In addition, the non statutory business of Certified Public Accountants is non certified business.

The content of non forensic business and its impact on independence include:

Accounting Service

Accounting service is the main business of small and medium-sized firms, including agency bookkeeping, compiling accounting statements, processing payroll and so on.

The code of professional ethics of ACCA clearly stipulates that if the audited entity is a listed company, the accounting firm that undertakes its auditing business can not provide its services for the preparation of accounting statements, but it does not explicitly prohibit the accounting firms from offering such services to the non-listed company.

In fact, large companies with large internal control systems rarely require accounting firms to provide such services.

On the contrary, many small businesses often require CPA to prepare accounting statements before implementing the audit business.

Because accounting services and audit services at the same time create a contradiction between themselves and create a threat of self-evaluation, such services are considered to be detrimental to the independence of certified public accountants.

Tax service

Tax services include tax agents and tax planning.

A tax agent is a certified public accountant who accepts an enterprise or an individual.

Management consulting service

Management consulting service is a field of intense competition between certified public accountants and non certified accountants.

Its business scope is very wide, including advice and suggestions on corporate governance structure, information system, budget management, human resource management and business efficiency.

CPA conducts MAS, and the quality of consultation is judged by the results of customer management: for example, the improvement of management control, the effective control of cost, and the improvement of business efficiency. At the same time, the management also evaluates the CPA with the criteria of evaluation manager, that is, whether their services can add value to customers.

In the auditing business, certified public accountants may damage their independence because of economic interests.

In addition, because most companies entrust audit business and consulting business to the same accounting firm, some accounting firms tend to charge lower audit fees to attract customers to obtain lucrative non audit business, which is called Lowballing. This practice has caused quite a lot of controversy, which is considered to be harmful to the professional ethics and independence of certified public accountants.

Other professional services

Such services include assessment, review of contract compliance and other services that require professional skills other than auditing. For the effect of providing such services on independence, we can take a look at the case of Mir-rorGroup in 1999. In this case, the oopers&Lybrand firm, which provided MirrorGroup for the examination and evaluation services at the same time, was subjected to 57 charges related to its audit quality, and was fined 1200000 pounds by the Joint Disciplinary arbitration. However, insiders also believe that Coopers&Lybrand has served MirrorGroup for more than 20 years.