1-20. Berry & Associates, LLP
Robert Berry is the managing partner for Berry &
Associates (B&A), LLP. He was recently reviewing the firm’s income
statement for the previous quarter, which showed that auditing revenues were
about 5% below last year’s totals while tax revenues were about the same.
Robert also noted that the income from auditing was 10% less than for the
previous year. During the past few years, competition for new audit clients has
been intense, so B&A partners decided that it would be wise for the firm to
lower its hourly billing rates for all levels in the firm.
The firm’s client base is closely held firms that are mostly
very successful sole proprietors, as well as a number of small- and
medium-sized companies. Robert and the other partners have been brainstorming
ways to expand the revenue base of the organization. The partners know that
information technology is a tool that the firm can use to develop new lines of
business. Accordingly, the firm hired several college graduates over the past
few years with dual majors in accounting and information systems or computer
science. Given the recent financial results, Robert wants to encourage the
other partners to consider the potential to the firm of offering additional
professional services.
Requirements
1.
Would it make the most sense for Robert to
consider developing new types of clients or to consider offering different
types of services to the types of clients typically served by B&A?
2.
Robert remembers that the AICPA developed a list
of various types of assurance services that auditing firms might consider
offering. Describe three of these assurance services that might be a good fit
for this CPA firm. (Hint: Visit the AICPA’s Web page or a website of a large
accounting firm for a listing of assurance services.)
3.
What might B&A do to fully use the combined
strengths in accounting and information systems/computer science of its new
staff auditors?
