[TheBsEr]

Hi everyone,

I got my AUD exam on 28th but I have a few questions, so if anyone can provide some insight it would be greatly appreciated!

1. Is engagement letter required for compliation?

2. If there’s a going concern problem, but management provides adequate plans to alleviate the problem, does auditor still write a explanatory paragraph into unqualified opinion?

3. For an audit, is operating effectiveness test required? Because it says not required for understanding of Internal Control…but during the fieldwork do you test the design & operating effectiveness or do you only test design and if you rely on controls then you test operating effectiveness?

4. One procedure was to review repair and maintenace for capitalization of these expenses instead of expensing it? Aren’t we suppose to focus more on understating expense instead of overstating it? (AKA vice versa)

AUD - 91
FAR - 90
REG - 87
BEC - 91
Ethics - 98

[oneFREAKINGpoint]

1. Yes

2. Yes

3. I'll get back to you on that one… Edit: I'm pretty sure you have it right — it's not required for understanding the environment. If you choose to rely on the controls (and they are designed correctly), then you must make sure they are operating effectively as well.

4. It's less about the overstatement of the expenses and trying to figure out if there is equipment and the like that should be CAPITALIZED has been inappropriately expensed.

[goodluck2everyone]

1. Written communication is required, it is recommended that it be in the form of an engagement letter

2. yes

3. the only way you can test the operating effectiveness of internal control is through test of controls. After documenting the design of IC, if you begin test of controls and see that they are not operating effectively, then you go back and increase control risk, do less tests of control, and do more substantive tests. So yes, it is required to test the operating effectiveness because this is the only way to determine your substantive testing.

4. post above me is correct

BEC- 80
REG- 68, 71, July
AUD- 61 , 84
FAR- -- 75 🙂

[Author]

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