[jeff]

I’ve had a few requests for April/May Study Groups…March will be here before you know it.

In order to take an early April exam, you should begin studying…now. 🙂

[Kemy]

JUST took AUDIT today!!!!!!!!! Jeff – your flashcards and notes and audio are super awesome! That's what carried me through studying for AUD this time around. You're awesome. Thanks so much!

FAR - 02/24/14 - 86
AUD - 04/03/14 - 88
REG - 05/29/14 - 68 Retook 11/22/14 - 81 I PASSED!!!!!!!!! IM DONE! Thank You Jesus!
BEC - 07/19/14 - 85

[jeff]

Kemy wins post of the day 🙂

[BEACPA]

ayafzal78

Regarding your question on confirming your test date. Sure! No problem. All you have to do is go to the Prometric website and select the option to “confirm”. Hope this helps.

https://www.prometric.com/en-us/clients/cpa/Pages/landing.aspx

Cheers…

FAR - 2/28/14 PASS Praise be to God!
AUD - 7/5/14 PASS Praise be to God!
BEC - 11/29/14PASS Praise be to God!
REG - 2/28/14 PASS Praise be to God!

[BEACPA]

Greetings my Fellow CPA Warriors,

Quick question regarding Wiley Test Bank (WTB) vs Becker CPA MCQs.

Just wondering how prudent it would be for me to purchase the WTB if I already have Becker. Here are some questions I have:

Are the questions very similiar or did you learn a lot of additional information by using Becker and WTB together?

Did you feel like you would have done just as well with one or the other? If so, please explain a little.

Thank you in advance for any feedback you may have. Please feel free to add information outside the scope of my questions. Thank you very much!

Cheers….

FAR - 2/28/14 PASS Praise be to God!
AUD - 7/5/14 PASS Praise be to God!
BEC - 11/29/14PASS Praise be to God!
REG - 2/28/14 PASS Praise be to God!

[BEACPA]

Scarletknight,

Did you ever figure out the following:

“Hence, I am a little confused as to how becker got this answer for why DAR would increase if sales increased fraudulently. Given the nature of this formula, wouldn't a better answer be if sales were to DECREASE from one period to the next (instead of Increase) and collection processes stayed the same (lax, as they were the prior period)? Thoughts on this would be greatly appreciated!”

If not, are you able to provide a page where this is discussed in the Becker material (assuming)? I'm not at this section yet, but I will be sooner or later so I might as well try to get a grip on it now.

FAR - 2/28/14 PASS Praise be to God!
AUD - 7/5/14 PASS Praise be to God!
BEC - 11/29/14PASS Praise be to God!
REG - 2/28/14 PASS Praise be to God!

[scarletknight91]

@beacpa no i havent i actually literally just reviewed that question and decided to check this site to see if anyone came up with anything. im still lost on that question…

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[scarletknight91]

and there really isnt a page. becker oddly enough makes ratios an afterthought appendix but decided to make every other sim question involving ratios.. i wish they approached this chapter differently

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[Quinacridone]

Here how I do it:

I start out by computing AR turnover = Net Credit Sales / Avg. Receivables.

For example = 19,672 / 2,964 = 6.6

Then I convert to days (DAR) = 365 / AR Turnover = 365 / 6.6 = 55 days.

Now, the question wants to know what would make that DAR increase so much in year 2. The only way for the DAR to increase is the denominator must decrease more than the numerator (i.e. 365 / 5 = 73 days).

Going back to my AR turnover now. What would make my ratio lower?

1. If the numerator decreases more than the denominator (direct relationship) or

2. if the denominator increases more than the numerator (inverse relationship).

(these rule work for all ratios)

If I add fictitious credit sales, then the numerator (Net Credit Sales) increases but so does my denominator. The question is: which one will increase more.

If I have legitimate sales in all of Year 1, then my A/R is likely going to be reducing at a predictable pace (payments will keep reducing A/R). However, in year 2, I start bumping up my sales each month. Since I am not receiving any cash for these sales, then my transaction Debit has to go to A/R (CR to Sales). That means A/R is increasing…and increasing…and increasing each month without the benefit of A/R payments (the credit that should have been reducing the A/R balance). So my A/R in year 2 compared to year 1 is going to be increasing proportionately faster than the sales (because there is nothing decreasing the A/R balance like would normally happen). (think of all those debits into A/R without any credits going in to reduce it – fake customers don't pay off their accounts and the salesmen certainly aren't going to pay it down either).

Back to my ratio rules: if the denominator is increasing at a rate more than the numerator, then it is decreasing the overall ratio (inverse relationship). So if my A/R turnover is reduced, then that would explain how my DAR is increasing.

Now to make sure you got it (because I tend to use way too many words to explain myself): lets use Beckers formula.

Average Net Receivables x (365 / Net Credit Sales).

Year 1 (hypothetical numbers):

2,964 x (365 / 19672) = 55 days.

Year 2

6,000 x (365 / 22,000) = 99 days.

REG - Nov 4, 2013: 88
FAR - Feb 27, 2014: 86
AUD - April 5, 2014: 91
BEC - May 6, 2014: 83

Florida CPA 24 July 2014
(Done in seven months - thank you Jesus!!)

[greendotme]

Anyone using 2014 Roger CPA materials to study for Audit? I'm not used to Roger's new materials. He is no longer using Wiley. Are you considering to supplement with Wiley? I'm just not sure if Roger's questions will be enough.

[BEACPA]

Scarletknight,

Not that you haven't already thought of this, but I thought I'd throw it out there anyway. Becker has a Support Center for students. It might be worth a shot sending this question to Becker's support center and seeing what sort of response you get. Good luck!

FAR - 2/28/14 PASS Praise be to God!
AUD - 7/5/14 PASS Praise be to God!
BEC - 11/29/14PASS Praise be to God!
REG - 2/28/14 PASS Praise be to God!

[Quinacridone]

Beacpa – I guess you're indicating I may be incorrect on my explanation of the question. I'll look more at it tonight again. I saw this is from an AICPA released sim (2013) which I was doing last night and worked on. The AICPA had the same answer about it being fictitious sales.

REG - Nov 4, 2013: 88
FAR - Feb 27, 2014: 86
AUD - April 5, 2014: 91
BEC - May 6, 2014: 83

Florida CPA 24 July 2014
(Done in seven months - thank you Jesus!!)

[KenDogRooRoo]

Hey everybody, I got a question regarding how in depth I should go in studying. I'm studying out of the Wiley book and every so often it tells me I should read over the AU-C sections, which I do but don't retain much. Do you think it would be at all useful to go through the AU-C summaries in Wiley and take extensive notes on them? I'm just not sure how fully understanding the sections will help. Sorry for formatting on my phone; thanks!

FAR - 10/2013 83
BEC - 11/2013 77
REG - 02/2014 87
AUD - 05/2014 90

Cali Candidate

[scarletknight91]

Quinacridone: Thank you for a response. this question has been plaguing me since i came across it.

I have to play a little devils advocate here though because im still a little lost with this. First becker has explained to us that b/s accounts are less predictable than I/S accounts; regardless, let’s continue with your scenario. You’re arguing that A/R is increasing at a higher rate than NCS; im confused as to how A/R’s rate can exceed NCS if they go $ for $ when they are reported in the journal. DR: A/R $XXX CR: Sales $XXX for an equal dollar amount. Hence, how can the rates be different? Yes, the aggregate account balance for A/R will be accumulating moreso than sales since sales is cleared each year and the A/R account accumulates, but A/R’s rate isn’t going to differ from sales. If the rates are the same, and fictitious sales are being recorded, then DAR will have to increase.

Mathematical proof:

Y1 NCS = 250

Y1 AR = 250 (they are terrible at collecting)

Acct. Rec Turnover = 1

Y1 DAR = 365

_________________________________

Y2 NCS = 500

Y1 AR = 250

Y2 AR = 500 (since Y2 AR must equal Y2 NCS since they are terrible at collecting and there can’t be any collections from fake customers)

AR Turnover = NCS / Averaged AR

AR Turnover = 500 / [750/2] = 500/375 = 1.33

Y2 DAR = 365/ 1.33 = 274

Even if there were some collections from actual customers in Y2, Y2 AR would decrease and thus bring down the denominator’s value even more thereby further increasing AR turnover, further reducing DAR. See my point?

FAR: PASSED
REG: PASSED
AUD: PASSED
BEC: PASSED

DONE

[Quinacridone]

If your company is really bad at collecting, and in a perfect world where sales and AR are absolutely equal, then year 2 AR should include all of year 1 AR (AR would not zero out like sales would). That means that your Year 2 AR turnover is 500 / ((500+250)+250)/2) = 1. So mathematically, your scenario would not allow the ratio to change at all. The key is on the proportion of change, and since this scenario has no change, then it would be unlikely that anything other than increased sales occurred over year 2. The auditor would be looking for ratio changes.

REG - Nov 4, 2013: 88
FAR - Feb 27, 2014: 86
AUD - April 5, 2014: 91
BEC - May 6, 2014: 83

Florida CPA 24 July 2014
(Done in seven months - thank you Jesus!!)

[Julia_anika]

SOS!!!

Last minute help needed.

Compilations of projections and financial forecasts are under SSAE or SSARS?

Also, please correct me if I'm wrong:

Reviews of non issuers –> SSARS

Interim review of non issuers –> SSARS

Review of issuers –> PCAOB

Thanks

p.s. I studied so much this time that I feel now that I'm totally lost in the material..

NYC, NY
FAR - 82 Jan 2014
AUD - 86 Apr 2014
BEC - 77 Aug 2014
REG - 79 Nov 2014

[Author]

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