[NeedsA75]

For those of you studying for AUD, I thought we could have a thread where we asked each other questions that we are unsure of…I saw a similar thread for BEC and it really helped me in certain areas..

It goes like this: answer the most recent question in the thread, and then ask a question of your own. It doesn’t have to be a question right out of the study material, but can be more of a general question..

I’ll go first:

Q. How long does an auditor have to retain their working papers after the completion of an audit for issuers and non-issuers?

[mooseonloose]

@Spartan so excited for assertions! yipeee lol

Q: two types of test of detail are ( ) and ( ).

[NeedsA75]

A. Test of transactions and test of account balances

Q. What kind of report is prohibited from being issued for prospective financial statements?

[mooseonloose]

That's right we use test of detail to test Transaction, balances, and disclosure.

I meant to write two types of substantive test are test of details and substantive analytical

A: review?

Q: PCAOB will conduct annual inspection of public companies that regularly provide audit reports for more than ( ) issuers

[NeedsA75]

Yes, a review is prohibited for prospective financials.

A: 100?

Q: What level of assurance to agreed upon procedures provide and do you restrict their use?

[Spartans92]

A: Agreed upon Procedures provide Limited assurance? Independence is required and yes the report is restricted to specific parties such as management and those charged with governance.. The report should outline the procedures specifically agreed by both parties and are not the responsibility of the auditor to determine what those are rather the specific party outline what needs to be done etc.

Dang we are moving with this thread!!

Question: how many years does a lead partner have to rotate for non-issuers? On top of that what is the cool-off period?

BEC- PASS

[Spartans92]

I like this more than the actual thread because we are constantly asking questions and answering them.. It allows us to learn and also test whether we understand or not! Better than doing MCQ haha

BEC- PASS

[NeedsA75]

Agreed upon procedures provide NO assurance…everything else is spot on.

A. 5 year rotation period and 1 year cool off period…It may be 7 year rotation for non-issuers? Also, do you mind giving a brief example of the cool off period because for some reason that confuses me a bit..

Q. Summarize the main points of the auditor's responsibility section of an unmodified audit report.

[mooseonloose]

A:Repports crame

Responsibility express option, plan and perform audit to obtain reasonable assurance. Audit involves performing procedures to obtain audit evidence. procedures include assessment of the risk of material misstatement. The auditor consider test of internal control but not for purposing of expressing an opinion on the effectiveness of the internal control. auditor evaluating reasonableness of significant accounting estimates made by management and evaluating overall presentation of the financial statement.

Q: Can substantive procedure be eliminated? Can relying on controls be eliminated?

[Spartans92]

I think the cool-off period is 2 years for the engagement partner. I recall it is 5 year cool off for ISSUERS if you're the partner. the 1 year cool off is for people who have been on the engagement to accept a job with a client if their role is big enough to influence financial statements..

So for example, if I was the lead partner to audit General Motors. I can work on it consecutively for 5 years and I have to stay off on it for 5 years thereafter before jumping back on. If it is a private (non-issuer) then 5 year on 2 year off would apply.. again, I will have to check on the cool-off for non-issuers. LOL

@moose, substantive procedures cannot be eliminated in full. Little of it is required. Relying controls can be eliminated if it is completely ineffective. We do not have to test any control if it is not working.. hence we need to do more substantive testing, and preferably close to balance sheet date rather than at interim.

BEC- PASS

[NeedsA75]

Thanks Spartans, I got the cool off periods mixed up and was thinking about someone from the engagement team going to work for the client…Yes, 5 years on 5 years off is what it is..

Moose, what was the answer to your PCAOB inspection question? Also, correct on your REPPORTS CRAME answer

[mooseonloose]

I need to get my cool off period and rotation cleared before the exam ugh.

@Need Yes, 100 or more.. the exam can put 101 to trick you.

@spartan correct! in what instance we cannot eliminate control?

[Spartans92]

We cannot eliminate control if management asserts on it operations. Then we as an auditor should perform some type of control testing OR if it is an IT environment. Then test of control is required.

BEC- PASS

[Spartans92]

Q: If auditor is trying to see whether or not customers are properly billed. what procedures could be performed?

BEC- PASS

[mooseonloose]

Correct!

who is responsible for detecting fraud?
who is responsible for detecting noncompliance?

[mooseonloose]

@spartan
Completness

[Author]

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