Question

Which of the following is false regarding activities and structure of CPA firms?

		CPA firms cannot perform tax returns for audit clients.
		There is a heirarchy with CPA firms that employees work through as they gain experience
		In addition to auditing, CPA firms may also perform business valuation, forensic accounting and information technology advisory services.
		Six organizational structures are available to CPA firms.

Answer 1

Following statements are false regarding the activities & structure of CPA firms:

1. There is a heirarchy with CPA firms that employees work through as they gain experience.

It is not necessary that a firm must have a heirarchy, depending on the size of the firm, duties may be combined or divided into a hierarchy.

2. Six organizational structures are available to CPA firms.

The structure of an CPA firm looks generally like an triangle (pyramid references are for Ponzi schemes/multi-level marketing organizations): the partner is at the top, with several managers reporting to the partner. Several senior associates report to each manager and staff accountants report to the senior associates. Although there may be additional layers and different titles within firms, the basic structure remains the same.