AUD Study Group – Q2 2018 - Page 4

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  • March 25, 2018 at 5:48 pm #1749017
    Allsheneededwassome
    Participant

    This is probably a stupid question but I don't see how these are both “Not a subsequent event”

    – A material amount of inventory at a remote warehouse was not counted by the client as of 12/31/Y2.
    – Several material transactions were not recorded in the financial records as of Dec 31. These were uncovered during the audit.

    If these are material transactions that existed as of the balance sheet date, shouldn't they be subsequent events adjusted for in the F/S?

    March 26, 2018 at 2:22 pm #1749684
    Yay75
    Participant

    Greetings all,

    I will be starting to study for Audit today after passing REG after 3 attempts and BEC expiring in November

    I will schedule exam late May/June.

    Looking forward to studying with you all!

    March 26, 2018 at 3:17 pm #1749755
    SONA
    Participant

    I am not sure if my reply is correct. Seems like, the financial statements are materially misstated and the following are not subsequent events.

    The first one is : CUT-off, Completeness assertion.

    The second is: Completeness assertion.

    Events occuring during the time interval between the balance sheet date but before the report is issued. TWO types of subsequent event:

    Type 1 : Some events provide evidence of conditions existing at the balance sheet date that requires adjustment (recognized). Ex:the bankruptcy filing of a customer on Jan 4, 2001 may indicate that a receivable from that customer at December 31, 2000 ought to be written – off.

    Type 2 : Some events do not affect the balance sheet, as the conditions did not exist at the balance sheet date but still represent important information that should be disclosed (non-recognized) to assist users of the financial statements in interpreting them. Ex: a fire that destroyed the company's main warehouse on January 4, 2001 does not change the inventory balance on Dec 31, 2000, but would effect the significance of that inventory and suggest possible future difficulties.

    March 26, 2018 at 4:24 pm #1749795
    CPWAT
    Participant

    hey guys I am using Gleim for AUD and they have about 3 chapters with a lot of flowcharts for revenue cycle and cash disbursement cycle. I was thinking since every company seems to be a little different in the mix of things. Are these really that important? After a quick search on older threads, it seems like most ppl don't get flowchart problems.

    So I guess I should just focus on the process itself and try to identify the area of RMM?

    March 26, 2018 at 10:25 pm #1750013
    Allsheneededwassome
    Participant

    @SONA: Oh wow yes. Duh! Its not a SUBSEQUENT event. “Conditions already existed at the BS date” part is what I was focusing on. Plus foggy brain. Thank you!

    March 26, 2018 at 11:22 pm #1750071
    famh110
    Participant

    @allsheneed, you will have still have to be careful when reading such questions. just to clarify conditions that occurred during the year before the balance sheet date are still referred to as subsequent events. so don't let the term “SUBSEQUENT” be the only determining factor so in my understanding, they both are subsequent events.

    Subsequent events – events occurring between the date of the financial statements and the date of the accountant’s review report. There are two types. 1st One requires a financial statement adjustment as it is material to the financial statement (like the scenarios you mentioned) whereas for the second type, financial statement adjustment is not needed

    Another term to look out for is:
    Subsequently discovered facts – facts that become known to the accountant after the date of the accountant’s review report that, had they been known to the accountant at that date, may have caused the accountant to revise the accountant’s review report

    This is also where they like testing on dual dating the reports etc

    March 26, 2018 at 11:36 pm #1750085
    famh110
    Participant

    @Julia, thanks for keeping us in check. For right now, I am behind my schedule but if I catch up this week then I can be back on track for finishing everything by mid April and then testing towards the end of the month. I have to take Reg in this quarter as well so ideally i should have been done by Aud by mid month. How many weeks did you study for reg retake?

    March 27, 2018 at 9:14 am #1750286
    SONA
    Participant

    Who is testing second week of April?

    March 27, 2018 at 10:33 am #1750356
    Allsheneededwassome
    Participant

    @Fahm: See that’s what’s I had thought too. But Becker said they were both not a subsequent event. I’m going to try and find that SIM again and put the explanation here if I can find it. I also picked subsequent event in my answers

    March 27, 2018 at 11:54 am #1750437
    CPAwannab
    Participant

    Signatures are back 🙂 Can someone tell me how do I update to reflect passed exam?

    March 27, 2018 at 12:04 pm #1750452
    famh110
    Participant

    @AllSheneeded…if you can post the question as well that would be great. i based my answer after reading the AU Section 560, see below
    https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-00560.pdf

    March 28, 2018 at 7:11 am #1751006
    Anonymous
    Inactive

    Good morning all!

    I'm going to read all the modules in A4 one more time, then work the MCQs for each module within A4 again, then do cumulative Progress Tests from A1-A4 if I have time today, but I plan on starting A5 tomorrow latest.

    I hope everyone's AUD studying is going well. Out.

    March 28, 2018 at 7:52 am #1751033
    Tim
    Participant

    I'm 9 days from test day doing final review stuff. But I'm struggling in that I'm getting like 90% on every set of MCQ's I do. Is Gleim's AUD section not challenging like their other sections? I'm probably going to buy Ninja for the first time just to see if there's stuff I'm missing. Usually at this point I'm identifying weak areas and relearning them but I'm just not finding any to work on. It's making me nervous instead of confident.

    March 28, 2018 at 12:33 pm #1751229
    JMG
    Participant

    I know the audit documentation retention period is 7 years, but I could have sworn I saw an mcq that the answer was 5 years. Am I thinking of a different question? What would be retained for 5 years instead of 7?

    March 28, 2018 at 12:36 pm #1751235
    Anonymous
    Inactive

    @JMG – 7 years for issuers (PCAOB) and 5 years for non-issuers (private).

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