AUD Study Group – Q1 2018 - Page 5

Hey, now I get it. Thanks a bunch……………

Great explanation.

Compensating control means another control is in place to mitigate the absence of proper control.

In above example, if the bookkeeper has access to the plates but a control is in place where the physical check can only be access by the treasurer and require that such checks goes back to treasurer for mailing… then a compensating control is in place.

Are International Standards tested much in Audit? I didn't see it in the blueprint but just came across a MCQ in roger that mentioned it.

“During the course of an audit being performed under International Standards on Auditing (ISAs), while performing a test on a sample, the auditor detected a misstatement that appears to be an anomaly. The auditor is trying to determine how to account for this misstatement in relation to the population from which the sample was drawn.”

A. Since the misstatement is considered an anomaly, the auditor will ignore the misstatement in evaluating the population.

B. The auditor is required to include the misstatement, along with other identified misstatements, and project the results to the population.

C. The auditor will perform additional procedures to verify that the misstatement is an anomaly and, upon doing so, will adjust for the misstatement without projecting it to the remainder of the population.

D. The auditor will make an inquiry of the client to verify that the misstatement is an anomaly and, upon doing so, will adjust for the misstatement without projecting it to the remainder of the population.

The correct answer is C, which seems pretty straightforward no matter what standards are at play…

Adit evidence :(. Feeling less confident in this area. Finished Roger's Audit evidence chapter, but did not get a grasp of the U P E R C V OR R A C E mnemonic. Sometime Observation is most effective but sometime observation is not enough and need to re-perform or inspect.
Uhhh………. everything driving crazy. I did a DRS TBS and guess what, I spend 30 min reading details and clicking the best answer. But I got so many of them wrong :(.

So many scary thoughts are coming to my mind right now. Anyone better study policy for Audit evidence. I think watching / listening lecture again will waste time. While I read the book seems everything so correct and obvious. I think doing many MCQs will help. On the another post I read Wiley's TBS are not big help(waste of time) now reconsidering to buy the test bank or not buy. :?. I have NINJA MCQs.

Any tips guys.

@itooshallpass I have never seen an international question on the AUD exam, but that doesn't mean one or two won't pop up.

guys, what is the “Summary Scheduale”? and why we use it in the Audit?

@ydiab, I have next to no experience with Audit so I don't know how this will carry over, but for FAR the Ninja sims were super helpful. I set a goal to do every single one available at least once. I definitely think they helped me more than the Roger sims.

Question from Roger: “When reviewed or compiled prior period financial statements of a nonpublic entity are presented in comparative form with audited financial statements in the subsequent year, the unaudited financial statements should be clearly marked to indicate their status and:

I. The report on the unaudited financial statements should be reissued.

II. The report on the audited financial statements should include an other-matter paragraph which states the service performed in the prior period.”

The answer is Either I or II. My question is, would the reissued report in option I give an opinion? Is it acceptable to issue an opinion on financial statements compiled by the same accountant/firm? Or would it impair independence.
I guess the answer could mean that they just reissue the compilation report so that it's clear that those statements WEREN'T audited?