1.

How is competitive bidding, advertising, direct solicitation and related

practices related to the declining value of independent audit product?
2. What are the credentials that make one practitioner capable of
performing non-traditional services?
3. What are the characteristics of a person assigned to the examination of
environmental and labor practices? Does an accountant qualify for this
engagement?
4. Are there any standard criteria(procedures, laws, labor regulations) to
ascertain the degree of correspondence with its findings? What are
those and o ddjjmj n whose jurisdiction should a practitioner follow?
Summary:

Questions:
1. Define each of the following types of professional services:
consulting services, attestation services, agreed-upon procedures
engagements and assurance services. Explain how, if at all, these
services overlap.
a.) Consulting Services- is a professional service in which a CPA
develops findings, conclusions and recommendation based on the
practitioner technical skills, knowledge, observations, education and
experiences of the consulting process that are presented to the client
for considerations and decision making.
b.) Attestation services- is a professional service in which a CPA
expresses a written opinion of the reliability of the assertion that is the
responsibility of the client. Under attestation services, evaluation of the
subject matter would have already been conducted by the client
against a criteria and this evaluation would be confirmed by the
practitioner if fairly presented or not.
c.) Agreed-upon procedures engagements-is a professional service in
which a practitioner engage to report on factual findings based on the
agreed-upon procedures with the client.
d.) Assurance services-is a professional service in which a CPA
expresses an opinion with regards to the evaluation of the subject
matter.
In my own point of view, these types of professional services may
overlap. For instance, attestation services and assurance services are
terms that are used interchangeably because both practitioner in these
type of service expresses an opinion that improve the information or the
context of information so that decision makers may make more informed
and better decisions. It would not be misleading to say that all attestation
services are assurance services but not every assurance service is an
attestation service. This is because assurance service is a broader term
and concept compared to attestation service. In auditing, attestation is
only a subset of assurance engagement. Therefore, assurance service is
just any services such as reviews and compilation services that provide
independent and professional opinion that reduces the risk from incorrect
information.
Furthermore, the above-mentioned professional services engage a
practitioner to develop findings. The difference only lies on its treatment
along with service provided. In consulting, the practitioner will develop
conclusions and recommendations based on the findings conducted.
Informations found in attestation and assurance service shall be used to

evaluate the degree of correspondence with an established criteria. In

agreed-upon procedures engagement, the client shall make comparison
between the expected results and practitioners report.
2. Visit the websites of the major international accounting firms.
Identify nontraditional services currently marketed by these firms.
List several of these services and briefly describe their nature. Of
the services you identified, are there any that you believe
accounting firms should not provide? If so, explain.
a.)
Forensic Accounting Services-Forensic accounting services
generally involve the application of specialized knowledge and
investigative skills possessed by CPAs to collect, analyze and evaluate
data and evidential matter. Forensic accounting services utilize the
CPAs specialized accounting, auditing, economic, tax, fraud detection
and other skills to perform various types of investigations, and to
communicate findings in a courtroom or administrative setting.
Forensic accounting services include litigation support, bankruptcy
support, fraud and special investigations, dispute resolution, among
many other services.

b.) Wealth Management Services- Wealth management is a high-level

professional service that combines financial/investment advice,
accounting/tax
services, retirement
planning and
legal/estate
planning for one fee. Clients work with a single wealth manager who
coordinates input from financial experts and can include coordinating
advice from the client's own attorney, accountants and insurance
agent. Some wealth managers also provide banking services or advice
on philanthropic activities.
c.)Broker-Dealer Services- A broker-dealer is a person or firm in the
business of buying and selling securities, operating as both a broker
and a dealer, depending on the transaction. The term broker-dealer is
used in U.S. securities regulation parlance to describe stock
brokerages, because most of them act as both agents and principals. A
brokerage acts as a broker (or agent) when it executes orders on
behalf of clients, whereas it acts as a dealer (or principal) when it
trades for its own account.

d.)
Tax Planning & Compliance Services-These nontraditional
services engage the firm to keep abreast of all current tax legislation
and being always available to provide guidance on issues that may
affect a business. It requires a thorough knowledge of both domestic
and foreign corporate tax law which can be an invaluable asset in any
discussion or situation regarding tax issues.
e.)
Human Resource Consulting Services- Providing strategies
and recommendations to effectively manage human resources as the
most valuable asset of a company. This consulting service provide
assistance to recruiting, benefit plans, compensations plans, policy &
procedure manuals, management training & development, training
programs and insurance of employees.
f.) Lease Purchase Analysis Services- Lease Purchase Analysis Services
involves the analysis of lease or buy decisions as well as other financial
aspects of the potential purchase specifically the tax considerations.

g.) Litigation Support Services- Litigation Support Services includes

assisting legal counsel in determining necessary and important
discovery documents, evaluating the opposing expert witness and
work product, assisting legal counsel in prioritizing case strategies
relative to probable damage areas and amounts and in developing lists
of questions to ask opposing expert.

These are the list of non-traditional services that accountants are not
qualified to perform.

1. Broker-dealer services- the risks associated when these services is

provided by appointed CPA firm of the client is that there is a possibility
that the firm may not disclose material conflicts of interest, abusive
sales practices and other misrepresentations. For instance, the
accounting firm providing a brokerage act may distort information in
buying and selling of securities in its own advantage while the client
carries the burden. This conduct impairs the auditors independence
due to a direct involvement in the clients assets.

2. Human Resource Consulting Services- There are requisites that an

accountant lacks in performing human resource consulting services.
One important qualification is that a person should acquire
accreditation from the Chartered Institute of Personnel and
Development (CIPD). These qualification signify that you are up to date
with developments in HR and that you are committed to best practice
as a HR professional. One must be knowledgeable with the labor rules
and regulations. With this consideration, accountants subject of study
is not mainly focused on labor laws, rules and regulations. They lack
sufficient knowledge about human resource management. They are
also not suitable to give opinion with regards to the performance of
employees, need of further training and compensation schemes
because it is not practicable on their part to conduct a day-to-day
supervision of clients employees in the working area.

3. On what types of engagements must CPAs be independent?

Identify types of engagements on which CPAs are not required to
be independent. What other traits should CPAs possess on
professional services engagements?
Type of Engagement
1. Audit
2. Review
3. Internal Control
4. Information Technology
5. Other Assurance Services
6. Management Consulting
7. Tax Services
8. Bookkeeping
9. Agreed-Upon Procedures
10.
Compilation

Auditors Independence
Required
Required
Required
Required
Required
Not Required
Not Required
Not Required
Required
Not Required

1. Good organization skills- An accountant should be organized in

doing his work. He must follow his schedule by preventing any
postponement. He must be good in time management through
performing significant tasks first. He must also show orderliness in
compiling physical documents and computer files for easy retrieval if
needed.
2. Creative thinkers- Another invaluable trait that accountants must
possess is being creative thinkers that enable them to conceptualize

ideas and solving problems innovatively. Not all the answers of the
issues which an accountant face are found in textbooks. Some must
utilize their experience and deep analysis of the clients dilemma.
3. Excellent

Communication Skills- Accounting process is not

completed without communicating to intended users. An ideal
accountant must have the ability to interpret accounting complex
concepts and financial information into a more straightforward and
clear explanation that can easily be grasped by clients. Its preferable
that an accountant is a good English speaker and also knows how to
converse in local and other foreign languages.