Non Audit Services Provided by CPAs

This article discusses the different non-audit services provided by CPAs, including review services, compilation services, and preparation services. It also explores the skills required for providing non-audit services and the factors to consider when choosing between providing non-audit services and auditing financial statements.

Running head: AUDITING AND ASSURANCE
Auditing and assurance
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Table of Contents
Non audit services provided by CPAs.......................................................................................2
Non accounting firm competitors for non-audit services...........................................................2
Skills required for providing non-audit services........................................................................3
Choosing between providing non-audit service and audit of financial statements....................3
References..................................................................................................................................5

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Non audit services provided by CPAs
Different on-audit services provided by the CPAs are as follows –
 Review service – the review service engagement helps the accountants in expressing
the limited assurances that financial statement are prepared in compliance with the
applicable accounting standards and includes disclosures those are appropriately
informative or the other comprehensive basis of accounting
(Archives.cpajournal.com, 2019).
 Compilation service – under compilation service the accountants apply the financial
and accounting reporting expertise for assisting the management in preparing the
financial statements and issuing the report to the client or to the 3rd party without
providing the CPA assurance regarding the statements Archives.cpajournal.com,
2019).
 Preparation service – under this, CPA is engaged by client for assisting or preparing
the financial statements or issuing the reports, even when financial statements are
intended to be used or provided to any 3rd party Archives.cpajournal.com, 2019).
Non accounting firm competitors for non-audit services
Apart from accounting firms the non-accounting firms those provides the non-audit services
are as follows –
 Tax and the tax compliance service who prepares tax forms, custom duties and payroll
tax
 Firms who promotes, deals or underwrites the shares of audited entity

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 Firms who provides legal services like providing general counsel, acting in the role of
advocacy in litigation resolution and negotiates on behalf of audit client (Campa &
Donnelly, 2016).
 Firms who provide services related to book keeping as well as preparing the
accounting records and the financial statements.
 Firms that provides valuation services
 Firms that provide human resource service related to cost control, structuring of the
organisation design and preparing the financial statements or accounting records for
statutory audit (Sharma, 2014).
Skills required for providing non-audit services
The person providing non-auditing services shall be able to draw the experience and
knowledge in the key risk areas including information systems, treasury operations, taxation,
and financial management, due diligence, detecting frauds, actuarial assessments and
regulatory compliance. Through inhibiting such knowledge in an organisation the separation
of audit and non-audit services will lead to improvement of audit quality (Wahab, Gist &
Majid, 2014).
Choosing between providing non-audit service and audit of financial statements
If I had to choose among providing audit services or audit of the financial statements I
will choose to provide not audit service. The reason behind that is provision of non-audit
services increases the technical competence, reduces the total costs, and motivates the
competition more intensely. Further, non-audit services do not hamper the auditor’s
independence and quality of the services. On the contrary, provision of audit services require
the service provider to comply with rules and regulations associated with professional
judgement. Further, it holds the responsibility for the decision taken on the basis of financial

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information stated in the financial statement that is audited by the auditors. Hence, comparing
the responsibility and accountability of both audits as well as non-audit services, I will
choose providing non-audit service (Bell, Causholli & Knechel, 2015).

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References
Archives.cpajournal.com. (2019). Archives.cpajournal.com. Retrieved 25 April 2019, from
http://archives.cpajournal.com/old/07086106.htm
Bell, T. B., Causholli, M., & Knechel, W. R. (2015). Audit firm tenure, non‐audit services,
and internal assessments of audit quality. Journal of Accounting Research, 53(3), 461-
509.
Campa, D., & Donnelly, R. (2016). Non-audit services provided to audit clients,
independence of mind and independence in appearance: latest evidence from large
UK listed companies. Accounting and Business Research, 46(4), 422-449.
Sharma, D. S. (2014). Non-audit services and auditor independence. In The Routledge
companion to auditing (pp. 89-110). Routledge.
Wahab, E. A. A., Gist, W. E., & Majid, W. Z. N. A. (2014). Characteristics of non-audit
services and financial restatements in Malaysia. Journal of Contemporary Accounting
& Economics, 10(3), 225-247.