DOCSLIB.ORG

Audit of Inventories : a Joint Study; Auditing Procedure Study; American Institute of Certified Public Accountants

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Audit of Inventories : a Joint Study; Auditing Procedure Study; American Institute of Certified Public Accountants University of Mississippi eGrove American Institute of Certified Public Accountants Guides, Handbooks and Manuals (AICPA) Historical Collection 1986 Audit of inventories : a joint study; Auditing procedure study; American Institute of Certified Public Accountants Canadian Institute of Chartered Accountants Follow this and additional works at: https://egrove.olemiss.edu/aicpa_guides Part of the Accounting Commons, and the Taxation Commons Recommended Citation American Institute of Certified Public Accountants and Canadian Institute of Chartered Accountants, "Audit of inventories : a joint study; Auditing procedure study;" (1986). Guides, Handbooks and Manuals. 37. https://egrove.olemiss.edu/aicpa_guides/37 This Book is brought to you for free and open access by the American Institute of Certified Public Accountants (AICPA) Historical Collection at eGrove. It has been accepted for inclusion in Guides, Handbooks and Manuals by an authorized administrator of eGrove. For more information, please contact [email protected]. Auditing Procedure Study Audit of Inventories American institute of Certified Public Accountants Statement o f Policy Auditing Procedure Studies are issued by the Auditing Standards Division and are part of the AICPA’s research program. Each study is designed to inform auditors of developments and advances in auditing procedures. The studies express the views of the author or study group. Auditing Procedure Studies are intended to provide practitioners with nonau­ thoritative practical assistance concerning auditing procedures. Comments on this study should be addressed to the Institute’s director of audit research. Comments will be treated as public information unless a writer requests that his comments be kept confidential. This Auditing Procedure Study has not been approved, disapproved, or otherwise acted on by the Auditing Standards Board, the membership, or the governing body of the American Institute of Certified Public Accountants. Therefore, the contents of this study, including the recommendations, are not official pronouncements of the Institute. Audit o f Inventories A Joint Study by: American Institute o f Certified Public Accountants Canadian Institute of Chartered Accountants Copyright © 1986 by the American Institute o f Certified Public Accountants, Inc. Published by the AICPA on behalf of the participating organizations American Institute o f Certified Public Accountants, Inc. 1211 Avenue o f the Americas, N ew York, N.Y. 10036-8775 The Canadian Institute o f Chartered Accountants 150 Bloor Street West, Toronto, Ontario M5S 2Y2 1234567890 AudS 8 9 8 7 6 Contents Foreword vii Introduction ix Significance o f Inventories ix Purpose o f Study ix Selection of Audit Procedures x Definition of Inventories x Emphasis o f Study x 1 Auditor’s Objective and Initial Planning Considerations 1 Auditor’s Objective 1 Existence 1 Completeness 2 Ownership 2 Valuation (Including Condition) 2 Presentation and Disclosure 2 Initial Planning Considerations 2 General Familiarization 2 Materiality 3 Audit Risk 3 Sampling 7 Use of Computer-Assisted Audit Techniques 8 Use o f Specialists 8 Use of Internal Auditors 9 Conclusion 9 2 Existence, Ownership, and Completeness— Planning Considerations 11 Auditor’s Objective 11 Historical Perspective 11 Interrelationship of Assertions 12 Planning 13 Introduction 13 General Familiarization 13 Potential Errors 13 Compliance Approach vs. Substantive Approach 14 iii Other Client Routines and Internal Control Considerations 17 Identification of Responsible Client Personnel 20 Tour of Client Premises 20 Multilocation Inventories 21 Inventories Held by or for Others 21 Using the Work of a Specialist 22 Precount Finalization 22 Summary of Planning Procedures 22 3 Existence, Ownership, and Completeness— Count Attendance and Postattendance Considerations 25 Inventory Count Attendance Considerations 25 Observing the Count 25 Performance o f Test Counts 26 Work-in-Process Considerations 27 Cutoff Procedures 27 Confirmation Procedures 29 Documentation 30 Alternative Procedures When Attendance Is Not Practicable 30 Postinventory Count Attendance Considerations 31 Testing Quantities on Final Inventory Listings 31 Following up Confirmations 33 Testing Cutoff 33 Documentation 35 4 Valuation 37 Auditor’s Objective 37 Planning 37 Introduction 37 Potential Errors 38 Assessment of Client’s Valuation Methods 38 Use o f Specialists 40 Cost Verification Considerations 40 Raw Materials and Goods Purchased for Resale 40 Work in Process and Manufactured Finished Goods 42 Other Considerations 46 Market Verification Considerations 47 Testing Condition of the Inventory 48 Testing Replacement Cost 49 Testing Net Realizable Value 50 Other Considerations 51 LIFO Inventories 51 Retail Inventories 51 Hedged Inventories 52 Construction Contracts 52 iv 5 Other Procedures 55 Analytical Review Procedures 55 Clerical Accuracy 56 Reconciling the Physical Inventory to the Book Amounts 56 Roll-Forward/Back Analysis 57 Inventory Count a Few Days From Year-End 57 Inventory Count Is a Longer Period From Year-End 57 Year-End Cutoff Procedures 58 6 Financial Statement Presentation and Disclosure 61 Auditor’s Objective 61 Inventory Aggregation and Classification 61 Presentation 62 Review of Pledges and Commitments 62 Intercompany Profit Eliminations 62 Related Party Transactions 62 Letter of Representation 63 Errors and Adjusting Entries 63 Audit Conclusion 63 Appendixes A Examples of Internal Control Considerations for Inventories 65 B Sample Inventory Attendance Planning Questionnaire 69 C Sample Confirmation— Inventories Held by Others 73 D Sample Confirmation— Inventories Held by Client on Behalf o f Others 75 E Sample Audit Program 77 F Sample Representation Letter for Inventories 91 G Examples of Computer-Assisted Audit Techniques 93 V Study Group Michael R . Van Every, CA, Chairman John C. Corkill, CA Coopers & Lybrand Price Waterhouse Mississauga, Ontario Toronto John C. Broderick, CPA Leonard L. Mortenson, CPA Arthur Young Yohalem, Gillman, Field and Agler New York New York Peter J. Carroll, FCA Belverd E. Needles, Jr., CPA Spicer MacGillivray D e Paul University Mississauga, Ontario School of Accountancy Chicago vi Foreword This study is designed to provide a discussion of suggested auditing pro­ cedures and the problems auditors may encounter in obtaining satisfaction about their clients’ representations regarding the physical existence, com­ pleteness, ownership, valuation and condition, and financial presentation and disclosure of inventories. The study is part o f the Auditing Procedure Study series o f the American Institute o f Certified Public Accountants (AICPA) and the Audit Technique Study series o f the Canadian Institute o f Chartered Accountants (CICA). It was prepared by a study group consisting of AICPA and CICA members. The study group compared generally accepted auditing standards in the United States and Canada and found them to be similar as they relate to the audit o f inventories. This study embodies examination standards contained in the AICPA Statements on Auditing Standards and in the auditing section o f the CICA Handbook as they apply to the audit of inventories. It was not part o f the study group’s mandate to consider the appropriate­ ness of the various methods of inventory accounting permitted under gen­ erally accepted accounting principles in the United States and Canada. Appreciation is expressed to the members of the study group for their efforts in producing this study. The participation of Donald E. Sheehy, CA, CICA Research Manager, who, at the direction of the study group, undertook the research and drafting of the study, is also appreciated. Don Pallais, CPA David J. Moore, CA Director, Audit and Accounting Research Studies Director Guides Canadian Institute o f Chartered American Institute o f Certified Accountants, Toronto Public Accountants, New York January 1986 Introduction SIGNIFICANCE OF INVENTORIES Generally, inventories reflect the characteristics o f a business m ore than any other asset does. Significant to manufacturing, wholesale, and retail organi­ zations, inventories frequently are also material to the financial statements of service organizations. It has been estimated that, for some types of busi­ nesses, inventories constitute 20 to 25 percent o f total assets1 and represent the largest current asset. A material inventory misstatement usually has a direct effect on current assets, working capital, total assets, cost o f sales, gross margin, and net in­ come. It can also have an indirect effect on items such as profit sharing and income taxes. Many complex and significant problems in an audit are related to inven­ tories. Inventories, production, and cost of sales constitute perhaps the most pervasive, significant, and difficult subject in accounting and auditing and, indeed, in business management generally.2 PURPOSE OF STUDY Except for some general guidance on physical inspection, little authoritative guidance exists for auditing inventories. This study discusses the circum­ stances that might be encountered and the types o f procedures that an auditor considers in obtaining assurance about client representations re­ garding existence, completeness, ownership, valuation (including condi­ tion), and financial statement presentation and disclosure o f inventories. The study emphasizes the need for proper planning, including a proper assess­ ment o f audit risk, to ensure that sufficient appropriate audit evidence about inventories is obtained. 1. James
Load more

Recommended publications
  • KPMG Internal Audit
    Top 10 key risks in 2015 KPMG Internal Audit kpmg.ch The role of an effective internal audit (IA) function today is much more than simply compliance. Competing in a rapidly changing business world, companies must grapple with emerging challenges seemingly every day: new and complex regulations, cyber threats, increased reliance on data and analytics, mergers and acquisitions, expanding international operations, outsourcing, and more. IA needs to stay current with these wide-ranging business issues as they emerge so it can remain relevant to the organization. These business trends carry new risks, and IA needs to continually monitor these risks and their potential effects on the organization. To provide the greatest value, IA must find opportunities to challenge the status quo to reduce risk, improve controls, and identify potential efficiencies and cost benefits across the organization. To help IA functions achieve these goals, KPMG LLP (KPMG) has surveyed its professionals and IA departments from companies in multiple industries. The result is KPMG Internal Audit: Top 10 key risks in 2015, which outlines areas where IA can improve its focus so it can more effectively add value across the organization and maximize its influence, including allocating its resources in those areas of highest impact to the organization. Top 10 key risks in 2015 1 Cybersecurity 2 Regulatory compliance 3 Antibribery/Anticorruption 4 International operations 5 Third-party relationships 6 Mergers, acquisitions, and divestitures 7 Strategic alignment 8 Integrated
    [Show full text]
  • The Role of Internal Auditing in Enterprise-Wide Risk Management
    IIA POSITION PAPER: THE ROLE OF INTERNAL AUDITING IN ENTERPRISE-WIDE RISK MANAGEMENT Issued: January 2009 ERM PP Revised: Page 1 of 8 Introduction The importance to strong corporate governance of managing risk has been increasingly acknowledged. Organizations are under pressure to identify all the business risks they face; social, ethical and environmental as well as financial and operational, and to explain how they manage them to an acceptable level. Meanwhile, the use of enterprise-wide risk management frameworks has expanded, as organizations recognize their advantages over less coordinated approaches to risk management. Internal auditing, in both its assurance and its consulting roles, contributes to the management of risk in a variety of ways. What is Enterprise-wide Risk Management? People undertake risk management activities to identify, assess, manage, and control all kinds of events or situations. These can range from single projects or narrowly defined types of risk, e.g. market risk, to the threats and opportunities facing the organization as a whole. The principles presented in this paper can be used to guide the involvement of internal auditing in all forms of risk management but we are particularly interested in enterprise-wide risk management because this is likely to improve an organization’s governance processes. Enterprise-wide risk management (ERM) is a structured, consistent and continuous process across the whole organization for identifying, assessing, deciding on responses to and reporting on opportunities and threats that affect the achievement of its objectives. Responsibility for ERM The board has overall responsibility for ensuring that risks are managed. In practice, the board will delegate the operation of the risk management framework to the management team, who will be responsible for completing the activities below.
    [Show full text]
  • Control Self-Assessment: an Introduction
    Control Self-assessment: An Introduction Control self-assessment (CSA) is a technique that allows managers and work teams directly involved in business units, functions or processes to participate in assessing the organization's risk management and control processes. In its various formats, CSA can cover objectives, risks, controls and processes. Internal auditors can utilize CSA programs for gathering relevant information about risks and controls; for focusing audit work on high risk, unusual areas; and to forge greater collaboration with operating managers and work teams. Managers can utilize CSA programs to clarify business objectives and to identify and deal with the risks to achieving those objectives. In both the facilitated workshop and survey formats of CSA, the people performing the work assess their own risks and controls, and increase the ability to achieve business objectives. Internal auditors, in a consulting role, often act as facilitators to help work teams in the assessment of risks and controls. Involvement of people performing the work in evaluation of risks and controls utilizes the expertise of the organization, increases buy-in to any action items, and focuses efforts on important business activities. Participants will benefit from understanding the different formats of facilitated and survey-based self- assessments, and discussing use of CSA in Enterprise Risk Management (ERM), regulatory financial reporting requirements, such as Sarbanes-Oxley (SOX), fraud and ethics programs, and operational auditing. After this seminar, participants will be able to evaluate the need for self-assessment in their organization's risk management and control processes, and design an implementation program for self-assessment in their organization.
    [Show full text]
  • Understanding Internal Audit
    1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Understanding Audit committees have an essential role to play internal audit in ensuring the integrity and transparency of corporate reporting. The PwC Audit Committee Guide is designed to help members of the audit committee work through their maze of responsibilities in a practical manner. 82 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Understanding internal audit The guide consists of: Audit committees have an essential role to play in ensuring the integrity and transparency of corporate reporting. • Introduction The PwC Audit Committee Guide is designed to help members of the • Setting up the audit committee audit committee work through their maze of responsibilities in a • Financial reporting: Reviewing practical manner. financial information • Risk management & internal control • Working with the external auditor Financial reporting Risk management & • Understanding internal audit • Appropriateness of accounting policies internal control • Disclosure requirements • Maintaining & measuring • Fairness and balance of MD&A/ • Understanding of key risk areas effectiveness operating review • Effectiveness of controls • GAAP conversion • Fraud risk • Communicating & reporting • Ethical, regulatory & Audit committees: compliance matters External audit Areas of focus Internal audit • Compliance frameworks • Appointment and remuneration • Charter, authority and resources • Scope of work • Scope of work • The audit committee’s role in • Independence requirements • Internal audit effectiveness ‘fit and proper’ requirements for • Significant audit findings/recommendations • Responses to internal audit • Reviewing the performance of external auditors recommendations financial services entities • Materiality in audits Maintaining Communicating & Regulatory, compliance & measuring reporting & ethical matters We hope you will find this guide of value to your important role.
    [Show full text]
  • INTERNAL and EXTERNAL AUDIT EVALUATION Core Analysis Decision Factors
    Core Analysis Decision Factors INTERNAL AND EXTERNAL AUDIT EVALUATION Core Analysis Decision Factors Examiners should evaluate the Core Analysis in this section to determine whether an Expanded Analysis is necessary. This module should incorporate and summarize audit findings from all of the completed ED Modules for a given examination. Click on the hyperlinks found within each of the Core Analysis Decision Factors to reference the applicable Core Analysis Procedures. Do Core Analysis and Decision Factors indicate that risks are appropriately identified, measured, monitored, and controlled? Note: If, after completing this module, examiners answer this question no, continue to the Management and Internal Control Evaluation (MICE) Expanded Analysis module. C.1. Has the board of directors established an audit committee that monitors and provides effective oversight of audit activities? Refer to Core Analysis Procedures #1-8 & Procedure #12. C.2. Has management established audit policies and procedures that are adequate for the size, complexity, activities, and risk profile? Refer to Core Analysis Procedure #11. C.3. Is the internal audit function independent from all functional areas? Refer to Core Analysis Procedure #10. C.4. Is the internal audit program sufficient for the risk profile? Refer to Core Analysis Procedures #11- 13. C.5. Are internal audit record keeping and reporting processes sufficient? Refer to Core Analysis Procedures #14-15. C.6. Is the internal audit function adequately staffed with auditors who possess an appropriate level of experience and expertise? Refer to Core Analysis Procedure #12. C.7. Do the internal auditors adequately identify, document, and report key risks in the organization? Refer to Core Analysis Procedures #15-16.
    [Show full text]
  • Internal Control Self Assessment Questionnaire
    Control Self Assessment Questionnaire Introduction This Control Self‐Assessment Questionnaire is a multipurpose tool to be used by departments in assessing adequacy of internal controls within their area. The primary purpose of this tool is for departments to self‐review in order to identify potential areas of weakness, non‐compliance, and/or unsound practices. This questionnaire is designed so that a “NO” response indicates an area of potential concern. A “NO” suggests that the budget unit may be in non‐compliance with a particular policy or procedure, and/or missing or non‐functioning control. Departments are encouraged to self‐assess themselves at regular intervals, depending on the outcome of the initial self‐assessment. A budget unit with a significant number of “NO” responses should make needed corrections, and then perform a follow‐up self‐assessment within a few months. Periodically, Internal Audit will select departments to perform a self‐assessment as of a particular time. The results of the Control Self‐Assessment Questionnaire will be forwarded to the Internal Auditor for review and random verification of the responses. The Control Self‐Assessment is divided into six categories as follows: I. General Controls II. Cash Controls III. Operating Expenditures IV. Personnel Expenditures and Travel V. Equipment and Computer Security VI. Ethics I. GENERAL CONTROLS Question Yes No N/A 1. The department performs a monthly reconciliation/review of its Comptroller Statements. 2. The department performs a monthly reconciliation/review of its payroll reports. 3. Unreconciled financial transactions are researched and corrected in a reasonable period of time. 4. The number and scope of department authorized signers are reasonable.
    [Show full text]
  • At the Budgeting the Internal Audit Function: How Much Is Enough?
    ® TONE POWERED BY at the TOP Providing senior management, boards of directors, and audit committees Issue 90 | December 2018 with concise information on governance-related topics. Budgeting the Internal Audit Function: How Much Is Enough? One hallmark of a successful internal audit function is that determine whether the internal audit budget is appropriate it is properly resourced. Chief audit executives (CAEs) for the organization. By following these steps, all can be must ensure that internal audit resources are “appropriate, assured that the internal audit budget will likely be a good fit sufficient, and effectively deployed to achieve the approved every time. plan,” according to The IIA’s International Standards for the Professional Practice of Internal Auditing. Board and audit committee members are similarly responsible for approving 1. Define the Audit Universe the right level of resources. Yet there is no simple formula Start the process by defining the audit universe, which is for developing an internal audit budget. made of distinct “auditable entities” that, taken together, You can’t determine the optimal budget for next year simply include every part of your organization — all departments, by adding an inflation factor to last year’s numbers — not divisions, systems, processes, subsidiaries, programs, even if last year’s budget was a perfect fit. Keep in mind activities, and even accounts. If it can be audited, it should that if the internal audit function was adequately resourced be included in the audit universe as an auditable entity, even in the past, audit recommendations for improving controls if there is no plan to perform an audit of that area in the may actually reduce the need for certain audits in this year’s coming year.
    [Show full text]
  • The Business Risk of M&A Activity and the Role of Internal Audit Function In
    International In-house Counsel Journal Vol. 2, No. 6, Winter 2009, 884–893 The business risk of M&A activity and the role of internal audit function in the risk management process NIKOLAOS P. DOUNIS, BBA, Msc, PhD Senior Internal Auditor, Cosmote Mobile Telecommunications S.A., Greece I. Introduction Mergers and acquisitions represent a dynamic process of corporate culture and strategy. Empirical evidence indicates a high rate of failure of M&A’s to create value for the shareholders of the firms. M&A projects encounter a great number of risks and often end up in failures and loss of shareholder wealth. These exposures are often the reasons that lead to major failures in the financial or operational area for the recently constructed entity. On the other hand, internal audit has evolved significantly during the last years from its traditional role of control orientation to a more proactive, risk based and consultancy role. But despite this evolution, internal audit function has no effective contribution during the M&A activity. Mergers and acquisitions tend to represent the ambition of adding value to the new company and internal audit function can prove that is a “value added activity” during the process and the various stages of a merger or acquisition. This paper will analyze the various risks that are present during the various stages of an M&A project and the role of internal audit activity, taken also into consideration the evolution of internal audit profession to a pro-active risk based function. The increasing importance of merger and acquisition activity to corporate strategy and the record of failure of such strategies in creating value gave the motivation to further analyze the role internal audit function possibly can play in the process.
    [Show full text]
  • Internal Control Questionnaires and Verification Procedures
    ICQs and Verification Procedures Comptroller’s Handbook December 2007 Internal Control Questionnaires and Verification Procedures Table of Contents Introduction............................................................................................................ 1 Pre-Examination Planning..............................................................................................1 During the Examination.................................................................................................2 Accounts Receivable and Inventory Financing........................................................6 Internal Control Questionnaire .....................................................................................6 Verification Procedures.................................................................................................8 Agricultural Lending .............................................................................................11 Verification Procedures...............................................................................................11 Allowance for Loan and Lease Losses ...................................................................14 Internal Control Questionnaire ...................................................................................14 Verification Procedures...............................................................................................15 Asset and Liability Management ...........................................................................17 Internal Control
    [Show full text]
  • Internal Auditing Around the World Volume 7
    Internal Auditing Around the World Internal Audit’s Role in Leading Enterprise Risk Management Initiatives VOLUME VII Introduction “ENTERPRISE RISK MANAGEMENT IS A PROCESS, EFFECTED BY AN ENTITY’S BOARD OF DIRECTORS, MANAGE- MENT AND OTHER PERSONNEL, APPLIED IN STRATEGY SETTING AND ACROSS THE ENTERPRISE, DESIGNED TO IDENTIFY POTENTIAL EVENTS THAT MAY AFFECT THE ENTITY, AND MANAGE RISK TO BE WITHIN ITS RISK APPETITE, TO PROVIDE REASONABLE ASSURANCE REGARDING THE ACHIEVEMENT OF ENTITY OBJECTIVES.” COMMITTEE OF SPONSORING ORGANIZATIONS OF THE TREADWAY COMMIssION (COSO), ENTERPRISE RISK MANAGEMENT — INTEGRATED FRAMEWORK, 2004 Over the years, we have written extensively on enterprise risk management (ERM) and stressed the importance of organizations establishing the oversight, control and discipline to drive continuous improvement of their risk management capabilities in a changing operating environment.1 These issues have always been on the minds of board members and management. However, at no time in recent memory has sound ERM guidance been more critical for business success. Amid perceived risk management failures in the wake of the recent global financial crisis and its lingering consequences, increasing regulatory scrutiny and growing technology risks, boards are mandating that ERM be a high priority in their organizations. As a result, the internal audit functions at the 10 companies profiled in this year’s Internal Auditing Around the World are taking steps to integrate risk management into their processes for formulating and executing their audit plans. The companies featured in this book – whether headquartered in Canada, China, France, Italy, Singapore or the United States – are truly international in the scope and size of their operations.
    [Show full text]
  • 10 Key Internal Audit Topics for Audit Committee Consideration
    August 2013 Audit Committee Brief From the Business, Industry & Government Team 10 Key Internal Audit Topics for Audit Committee Consideration By Richard J. Anderson, MBA, CPA J. Christopher Svare Submitted to Journal of Accountancy the data as a springboard to take a forward look at the profession and suggest 10 areas for Introduction scrutiny and focus in the years ahead. One of an audit committee’s most important responsibilities is to oversee the organization’s Although developed for internal auditors, the internal audit function, which plays a major role Imperatives for Change report also suggests in the areas of risk management and corporate a roadmap of important topics for joint governance. Typically, a Chief Audit Executive, consideration by the audit committee and chief or CAE, will have a direct reporting line to audit executive. They also point to the linkages the audit committee, which has functional between topics and the need to consider the oversight of internal audit activities. To assist implications of their interrelationships. audit committees with this oversight, and to provide a strategic framework for the direction 10 Key Questions for Audit Committees and orientation of internal audit, the authors Outlined below are the 10 imperative topics for outline 10 suggested topics for discussion internal auditors recast into rhetorical questions between the CAE and the audit committee. for audit committees. Each question is followed These topics, framed as questions, stem by a short discussion of the topic, examples of from the results of the largest-ever global related internal audit activities, and additional survey of internal auditors, which identified 10 topics and/or questions for audit committee “imperatives” for internal audit focus.
    [Show full text]
  • Nsba Temporary Regulations
    PROPOSED REGULATION OF THE NEVADA STATE BOARD OF ACCOUNTANCY LCB File No. ____________ Effective ______________ EXPLANATION - Matter in italics is new; matter in brackets [omitted material] is material to be omitted. AUTHORITY: §§1-3 and NRS 628.120 and 628.200; §4 NRS 628.120 and 628.386; §§5-7 NRS 628.120, 628.200 and 628.386; §8 NRS 628.120, 628.380 and 628.386. A REGULATION relating to accountants; revising the requirements for experience; revising the provisions for verification of experience and continuing professional education; and providing other matters properly relating thereto. Section 1: Chapter 628 of NAC is hereby amended by adding thereto the provisions set forth as sections 2 and 3 of this regulation. Sec. 2. 1. An applicant for a certificate of certified public accountant must complete: (a) 2 years or equivalent experience in the practice of public accounting as required by NRS 628.200(2)(a), that consists of the use of skills in accounting or auditing, finance, advising or consulting with clients on matters relating to management, the preparation of tax returns or the furnishing of advice on matters relating to taxes. The experience must be verified by one or more certified public accountants who have sufficient knowledge of and can certify the applicant’s work; or (b) 4 years or equivalent experience in internal auditing work or governmental accounting and auditing work considered substantially equivalent in the Board’s judgment. The experience must be verified by one or more certified public accountants who have sufficient knowledge of and can certify the applicant’s work.
    [Show full text]