[jimboace88]

Does anyone know of a good rule of thumb for when it is necessary to add an explanatory paragraph to the auditor’s report?

I keep falling into the homework questions’ traps of choosing “unqualified with explanatory paragraph” instead of “unqualified.”

FAR 07/27/11 - 87
AUD 10/01/11 - 85
BEC 11/15/11 - 87
REG 01/03/12 - 92

[Minimorty]

Good luck!

[hav2pass]

Here's my list:

– Auditor has substantial doubt about going concern

-consistency para to reference a change in accounting principle is added to end of an unqualified report

-client does not provide required supplemental information

-Departure from GAAP, its effect and the reasons compliance with GAAP would have been misleading (Conduct rule 203)

-emphasis of matter para (info that entity is part of a larger enterprise, significant related party transactions, important subsequent event, accounting matter affecting comparability like court-ordered divestiture)

One point where I always fall is a change in reporting entity due to a transaction or event (acquiring 100% stock or business combo). No para is needed for this.

If you need more details about consistency para, let me know.

BEC 86 (expires Sept'11)
FAR 85
REG 87
AUD 8/27 - waiting

[Anonymous]

Add

-emphasis of matter:

outside technical expert was cause of something

OR

if the auditor feels that an event/transaction needs a disclosures but is not required to be. (However, this is a catch all answer and you may ignore it…)

Hav2pass has a good list though. 😉

[mla1169]

and if I am as on track as I NEED to be to take this next week, the emphasis of a matter para goes after the opinion para but all of the others go before the opinion para? Thoughts……..

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[anonymous]

I remember it by saying if it affects what goes INTO the opinion paragraph, it goes before it. Otherwise, you should put it after (like emphasis of a matter or going concern).

REG -- October 3!!
FAR -- Pass
BEC -- Pass
AUD -- Pass

[mla1169]

Thanks wecan, that is helpful!

FAR- 77
AUD -49, 71, 84
REG -56,75!
BEC -75

Massachusetts CPA (non reporting) since 3/12.

[hav2pass]

Thanks DisorientedCPA. I will add that to my list. It will be helpful for the exam next week:)

BEC 86 (expires Sept'11)
FAR 85
REG 87
AUD 8/27 - waiting

[Phllop]

This was a helpful summary!

REG: 85
AUD: 74, 85
FAR: 74 (sigh)
BEC: 80 (don't even ask me how)

When I say C-P you say 'Ayyyyy show me the money'
-PO

[Anonymous]

Ya, it's definitely a spot where people are confused constantly. Auditing seems to be one giant “up to auditor judgement” on just about everything except for those tiny specific clauses that happen to inhabit every other paragraph of the codes…

[hav2pass]

@disorientedcpa – R u taking it today? Well if so lots of luck! Do well. We will wait for your report:)

BEC 86 (expires Sept'11)
FAR 85
REG 87
AUD 8/27 - waiting

[Anonymous]

Indeed… I'm sure I'll pass this time. It's all a bunch of gobbly gook and wibbly wobbly thoughts right now.. ha!

[WhyEvenTry]

Hear you go….this mnemonic rocks for what you are looking for. Thanks to Liliana Hickman Riggs from Becker-Dallas

Modified Unqualified Rules (ANGEL”S”)

– A – Another auditor – to emphasize seperation from the other auditor

– N – necessary depature from GAAP

– G – going concern

– E – emphasis of a matter

– L – Lack of consistency (justified of course)

– S – Supplemental info required by GAAP is ommitted

* ANGELS fall down….so the explanatory paragrah falls AFTER the opinion paragraph

– Exceptions for the N & E, the explanatory paragrah can fall before or after the opinion paragrah

You're welcome!!!

BEC - 71, 74, 77 (Feb - 2011)
FAR - 73, 78 (Feb - 2011)
REG - 83 (Nov 2010)
AUD - 71, 84 (May 2011) - Done!! CPA licensed in TX (July 2011)

[hav2pass]

Thats great. I don't think your “A” is correct.

Division of responsibility with another auditor doesn't require a para. Into, scope and opinion paras are modified. Am I right?

BEC 86 (expires Sept'11)
FAR 85
REG 87
AUD 8/27 - waiting

[WhyEvenTry]

You are close…….The Mnemonic is actually “A”NGELS

The “A” is seperatly listed because with another auditor, you will need to modify all 3 paragraphs (if the pricipal auditor decides to mention their work)

If you are taking responsibility for the other auditors work, then you do NOT make a reference to them.

BEC - 71, 74, 77 (Feb - 2011)
FAR - 73, 78 (Feb - 2011)
REG - 83 (Nov 2010)
AUD - 71, 84 (May 2011) - Done!! CPA licensed in TX (July 2011)

[jimboace88]

Thanks for the tips everyone! I'm doing better on the AUD homework than I did on FAR, that's for sure. While not great, my initial scores so far in A1 range from low 70's to mid 80's, so I'm feeling good. I already know not to worry about the score and just to use the MC as a learning experience, especially in the early stages.

In a way I envy the people who used to have to take this exam on paper all in one shot. This taking an exam and then having to get studying for the next one is awful…my motivation is shot to hell. The last thing I want to do after finally bidding good riddance to FAR for a while is keep studying to remind myself that I am nowhere near done with the other three parts of this monstrosity.

FAR 07/27/11 - 87
AUD 10/01/11 - 85
BEC 11/15/11 - 87
REG 01/03/12 - 92

[Author]

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