Bookkeeping To Trial Balance Icb Exam Papers

[Eustolia Pennycuff]

CLIENTRECORDS AND WORKING PAPERSApplicable Statutes or Administrative Rules

ORS 673.380

OAR 801-030-0015

OAR 801-030-0015(2) Client Records and Working papers

Licensees may not withhold client records and working papers described in the rule, based on the clients refusal to pay the licensees fees.

ORS 673.380 requires licensees to provide to a client or former client any records belonging to or obtained from or on behalf of the client, and a copy of the licensees working papers, to the extent that the working papers include records that would ordinarily constitute part of the clients records and are not otherwise available to the client. The requirement to return client records and working papers differs depending on whether or not the licensee has issued the work product that is the subject of the engagement.

A clients request for return of records that is made within a reasonable time and that occurs prior to the issuance of tax return, financial statement, report or other document prepared by a licensee: the licensee shall furnish, within a reasonable time to the client or former client any accounting or other records belonging to, or obtained from or on behalf of the client, that the licensee received for the clients account or removed from the clients premises.

EXPLANATION: If the CPA or PA received any records owned by the client, the records must be returned. Client records do not include the work product or working papers of the CPA/PA.

A clients request for return of records that is made within a reasonable time and that occurs after the issuance of a tax return, financial statement, report or other document prepared by a licensee: the licensee shall furnish within a reasonable time to the client or former client:

Working papers, for this rule, include but are not limited to all statements, records, schedules, general ledgers, journals, trial balances and depreciation schedules made by a licensee incident to or in the course of rendering services to a client or former client. Working papers are and shall remain the property of the licensee in the absence of an express agreement to the contrary between the licensee and the client.

EXPLANATION: The licensee is required to provide a copy of the work product that was issued for the engagement and return any records obtained from the client. The requirement to return working papers may vary; for example, if the client has a complete accounting system including a general ledger, sub ledgers, a fixed asset accounting process and maintains their own account analysis and reconciliations, only copies of the adjusting entries with explanations and any supporting working papers would be necessary.

The client may have a general ledger, but may depend on the CPA/PA to adjust and close the general ledger. In that event, copies of both adjusting entries, with explanations and any supporting papers, and closing entries would be provided to the client.

If the client does not have a general ledger and only provides the CPA/PA with transaction summaries that the CPA/PA uses to prepare a working trial balance, copies of the adjusted working trial balance, transaction entries, adjusting entries with explanations and any supporting working papers, and closing entries would be provided to the client.

If the CPA/PA prepared the fixed asset depreciation schedule because the client does not have one, or because the CPA/PA adjusted the clients schedule, a copy must be provided. If the CPA/PA prepared a bank reconciliation for the client because the client did not do one, a copy must be provided.

If the CPA/PA determines and prepares schedules of account balances that the client does not ordinarily prepare, and the CPA/PA reported on such schedules, copies must be provided to the client. Examples of such schedules include, but are not limited to:

If the client determined the account balances and provided schedules, copies of the schedules with the CPA/PA notes and conclusions are not required to be provided. Copies of the CPA/PA notes, or conclusions on any accounts or transactions, are only required to be provided to the client if the account balances or transactions reported on cannot be understood without consulting the CPA/PA notes or conclusions.

The decision on whether to provide copies of all or part of the accountants work papers depends on whether the clients records include the same information as the licensees work product. The client must have sufficient documentation to explain or prove transactions or events that are reported by the CPA/PA in the clients tax returns or financial statements when called upon to do so. If the documentation is sufficient and can be used for such explanation and proof, no copies are necessary. If the documents are not sufficient, copies are required.

Is my previous accountant required to provide my new accountant with an electronic copy of my QuickBooks bookkeeping records?

While the Board does not have a rule that specifically addresses QuickBooks, there is Board advice indicating the following:

If the client owns the QuickBook software, then all QuickBooks electronic records belong to the client. This situation may occur when a client pays for software that is maintained in the CPAs office.

If the CPA owns the QuickBooks software, then the Board considers the electronic records to be the CPAs working papers. Although the CPA is not required to provide a client with a copy of the software's electronic file, the CPA is required to provide the client with a paper copy of the ending balances. The paper copy required to be provided to the client would most likely include a trial balance, general journal, payroll records and any other journals that the CPA might have kept for the client. This requirement would most likely fall under OAR 801-030-0015(2)(b)(iii), when a client has no other method to obtain information pertaining to their ending balances.

COMMISSIONS, CONTINGENT FEES & REFERRAL FEESApplicable Statutes of Administrative Rules

ORS 673.012

OAR 801-030-0005

OAR 801-030-0005(3) and (4) describes the circumstances when licensees are prohibited from paying or receiving commissions, referral fees and contingent fees. The prohibitions apply when the holder of a permit or any partner, officer, shareholder, member, manager or owner of the firm performs any of the following services for a client who is also the subject of the commissions, referral fees or contingent fees:

A licensee performing public accounting services as a sole proprietor is required to register with the Board of Accountancy as a public accounting firm if the business organization engages in any attestation or compilation work.

If you determine that the business organization or public accounting practice is required to be registered with the Board, complete and return the firm registration form with the registration fee of $265, which is payable by check, MasterCard or Visa. Include a copy of the current registration, if any, that is required to be filed with the Corporation Division of the Office of the Secretary of State, including assumed business name registration, if applicable.

Firm registrations expire on December 31 of each odd-numbered year.

Holding out to the public as a public accounting firm without a valid registration is a violation of ORS 673.160 and OAR 801-010-0345.

An out-of-state firm with one or more Oregon licensed CPAs provides professional services to clients in Oregon. Other CPAs who are not licensed in Oregon assist with the project. The work project may require the physical presence of unlicensed staff in Oregon. The final work product is signed by an Oregon licensed CPA who is associated with the firm.

Question: Are staff members who do not sign off on final work product required to be licensed in Oregon if they assist with engagements for Oregon clients? The same question is presented when public accounting firms in Oregon assign unlicensed individuals to assist with engagements that are supervised by an Oregon CPA.

Short Answer: No

Discussion: ORS 673.320 requires an Oregon license to perform attest services; ORS 673.320 (11) describes circumstances when professional services may be performed in Oregon by CPAs who are not licensed in Oregon. Neither this section of the statute nor administrative rules consider the licensing requirement for staff members who perform work for an engagement that is supervised (and signed) by a CPA who is licensed in Oregon. The objective of the licensing requirement is to assure that persons who profess special competence in public accountancy have demonstrated their qualifications to do so. The situation described presents little risk of harm to the public if the engagement is supervised, reviewed and signed by an Oregon licensee. The scope of authority of staff members working on such engagements should be well-defined and any activities beyond the scope of authority may be unlicensed practice.

Unlicensed staff members should be advised not to provide answers to client questions that are unrelated to the specific engagement. Responding to unrelated questions would be beyond the scope of authority of the engagement, which is unlicensed activity.

Staff members who are licensed in another jurisdiction should also be advised not to hold out as a CPA or PA in Oregon. This can be avoided by including the state of licensing each time the CPA or PA designation is displayed or used

This is advanced clerical-accounting work involving the application of bookkeeping principles and practices.

An employee in this job performs advanced bookkeeping duties in recording, reviewing, processing, and controlling financial records and documents. Work involves examination of a variety of financial records and documents for propriety, quality, and conformance to established accounting procedures and maintenance of difficult bookkeeping systems. Work frequently involves responsibility for the establishment and review of internal processing procedures. Work is performed independently within a framework of prescribed accounting procedures and regulations. Fiscal and accounting problems and irregularities are referred to a professional fiscal officer or accountant who reviews work periodically and upon completion for overall standards of performance.

EXAMPLES OF WORK:

3a8082e126