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A Research Guide to the Audit Discourse CommunityWayne State UniversityAbstractThis paper will describe the audit discourse community. It will review the common goals of this community, its mechanisms of participation and intercommunication, the genres that its members use to accomplish these goals, the qualifications needed to become an auditor, and the specific language or terminology associated with the field. Lastly, this guide will discuss the recent developments/topics in the field. Common Public Goals:In simplest terms, they provide financial services to companies in need. More specifically, auditors are hired by a range of companies (from large companies like General Motors to family owned businesses) to take a closer look at their financial statements and operations (C. Conrad, personal communication, January 16, 2017). The auditor is responsible for looking over the statements in depth, in order to discover potential errors or even fraud. In addition, the auditor may talk to employees to gain a better understanding of the accounting system that is currently in place, and any types of known errors or fraud. Auditors also take on the role of observing the physical inventory that may be on hand at the time of the audit. They do so by walking around the client’s warehouse looking for specific items to ensure that everything has been properly accounted for (The American Institute of CPAs [AICPA], 2017). After a thorough investigation of the company’s accounting system and procedures, financial statements, inventory, and other accounting related activities the auditor puts together a report that highlights the financial status of the company and that may be helpful to internal and external users (government, and investors). Furthermore, the report may include advice or suggestions to the accounting department of the company that is audited on ways to improve their accounting system (C. Conrad, personal communication, January 16, 2017).Membership Qualifications:To become a member of the audit accounting community there are several qualifications that must be met. Many of these qualifications vary based on the state of one’s residence. In the state of Michigan, one must first fulfill the education requirement. The applicant is required to have completed 150 credit hours of college level education by an accredited institution (C. Conrad, personal communication, January 16, 2017). This requirement can be accomplished in several different ways, but it is very complex and rigid. It can be done by earning a Master’s degree in accountancy with 12 credit hours in graduate level accounting courses. On the other hand, it can be fulfilled by earning a Bachelor’s degree with a concentration in accounting. In this specific case, you must take at least 30 credit hours of accounting-related courses, and 39 credit hours of business-related courses (Department of Licensing and Regulatory Affairs [LARA], 2017). Note that one is still required to hit the 150-credit hour mark in this scenario. Moreover, in order for an auditor to advance in their career, it is highly advisable that they obtain their CPA certification. This entails that they must pass each section of the CPA certification exam. Once one reaches 120 credit hours of college education, one can sit for this exam and receive the certification but cannot practice as a CPA. The other CPA requirement states that one is to complete a full calendar year but no more than 5 years, and 2,000 hours of work experience under a CPA (LARA, 2017). Once these prerequisites have been met one can obtain one’s CPA certification in the state of Michigan. To become a successful auditor, it is critical to have exceptional problem solving skills and communication skills. Often one is forced to think outside of the box and look at a problem from a different approach. In addition, it is key to communicate in a concise and professional manner to the client. Lexis:In the discourse community of audit accounting there is a vast vocabulary that an individual must be familiar with. An audit accountant should be familiar with general business terms, as well as accounting terms such as “GAAS or Generally Accepted Auditing Standards”, and “GAAP or Generally Accepted Accounting Principles” (C. Conrad, personal communication, January 16, 2017). GAAS is an auditing standard set by the AICPA Auditing Standards Board which includes 10 set standards. These standards are organized into three categories: general standards, standards of field work, and standards of reporting (AICPA, 2017). The first standard of reporting states: “The auditor must state in the auditor’s report whether the financial statements are presented in accordance with GAAP.” Additionally, GAAP or Generally Accepted Accounting Principles are important to understand within this profession. These principles have been created to ensure fair and useful financial reporting. For instance, the historical cost principle states that an entity must report their acquisition costs of assets and liabilities not the current fair market value (AICPA, 2017). Lastly, some basic key business concepts would include “assets”, “liabilities”, and “net income”. By thoroughly understanding these terms/principles one will be prepared to work in this community.Genres:In the community of audit accounting there are many genres which the professionals use to communicate as well as to carry out their job. These genres include informal/formal emails, financial statements, and audit reports (C. Conrad, personal communication, January 16, 2017). Financial statements include a company’s balance sheet, income statement, statement of owner’s equity, and the statement of cash flows. These statements are given by the client to the auditor in order for the latter to try and find any type of error or fraud that might have occurred while the statements were prepared by the company. The financial statements are heavily numbers-based and typically include a small disclosure at the bottom written in words. Additionally, professionals in this community utilize audit reports to convey their final thoughts regarding a company’s inventory, financial statements, accounting procedures and control, and accounting related activities (C. Conrad, personal communication, January 16, 2017). These reports are typically extremely long documents that go into much detail about the company. The audit report is usually text-based, but may include specific examples of numbers that are noted as important. Mechanisms of Participation and Intercommunication:In the field of audit accounting there are a variety of ways in which individuals communicate with each other. For instance, audit accountants are constantly communicating via email. These emails might be formal or informal, but the main objective of this method of communication is to quickly and efficiently converse with colleagues and potential/current clients (C. Conrad, personal communication, January 16, 2017). Conferences are another method in which audit accountants can network and share ideas. The AICPA hosts various conferences across the United States yearly. For example, this January they are hosting events in Atlanta, Georgia and Beaverton, Oregon (AICPA, 2017). These are great platforms for professionals to meet new people as well as to reconnect with old friends. In addition to conferences, the AICPA also offers online webcasts. These webcasts are both informative and interactive. They give individuals the ability to learn new information about the accounting field, and communicate with instructors as well as with other people engaged in the webcast (AICPA, 2017).Major Topics/Significant Developments:The field of audit accounting changes each year with the development of new guidelines and procedures associated with the profession. The most significant recent development in this field was the implementation of the Sarbanes-Oxley Act in 2002 (C. Conrad, personal communication, January 16, 2017). The act was created as a result of the Enron and Arthur Andersen scandal (Pashkoff & Miller, 2002). The main goal of the act is to force companies to fully disclose accurate financial information by imposing revised auditing principles and regulations. Pashkoff and Miller assert that after the passing of the act, auditing firms have been highly scrutinized by the SEC (Securities and Exchange Commission) to ensure that all rules are being followed. According to the Wall Street Journal many believe that there is a possibility that President Trump will sign an executive order that will deregulate parts of the Sarbanes-Oxley Act. Throughout his campaign and his short time in office he has addressed the need for deregulation regarding companies. Some experts believe that with deregulation of the Act, companies will have a greater chance to succeed thus resulting in growth of the economy (Rapoport, 2017).The most common method of research in audit accounting is the field study (C. Conrad, personal communication, January 16, 2017), which auditors perform in order to learn new auditing techniques. In most cases individuals will go out into the field and interview other auditors by asking them specific questions related to their research question. In addition to the field study, teams are commonly formed to find any issues related to financial reporting by companies. These teams take an in depth look at procedures and come up with new ways to improve the current system used in those firms (C. Conrad, personal communication, January 16, 2017).In audit accounting a key figure is Barry C. Melancon. He has been the president and CEO of the AICPA since 1995, has almost 40 years of experience in accounting and has overseen the practice of tax and audit accounting. He has created several different accounting associations and has brought improvements to the CPA exam (AICPA, 2017). Kimberly N. Ellison-Taylor and Eric L. Hansen are also important individuals in the accounting and auditing community. These two individuals currently serve as Board of Directors for the AICPA and have held many different executive positions at large accounting firms (AICPA, 2017).Research Questions:How did SOX effect auditing firms? 2. What sectors is SASB involved in?3. What are some specific examples of research that accountants have done?References:AICPA- American Institute of CPA’s. Retrieved from Department of Licensing and Regulatory Affairs. Retrieved from , R. I., & Pashkoff, P. H. (2002). Regulations under the sarbanes-oxley act. Journal of Accountancy,?194(4), 33-36. Retrieved from , Michael (2017, February 14). Why Stop at Dodd-Frank? Some Want Trump’s Regulatory Overhaul to Go Further. Wall Street Journal. Retrieved from ................
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