[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. 🙂

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Qlad]

@hip, gabe…thanks…yesterday night it looked wrong to me..today morning it feels right…the problem is i'm all confused between low and high …small and large..i gave the first attempt almost a year back, so don not remember much…

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

An auditor may decide to decrease the acceptable level of risk when:

a.Many differences (audit value minus recorded value) are expected.

b.Initial sample results do not support the planned level of control risk.

c.The cost and effort of selecting additional sample items is low.

d.Increased reliability from the sample is desired.

The answer is C…why is it not A

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Gabe]

@Qlad you would not decrease risk if you are expecting more errors (in this case, differences). However, if you do a cost-benefit analysis and it turns out you can test additional samples at a low cost and a high benefit- go for it!

CPA, CFE
CISA- Experience will be completed by August 2016

[Qlad]

Which of the following statements about audit sampling risks is correct for a nonissuer?

a.Nonsampling risk can arise because an auditor failed to recognize misstatements.

b.Sampling risk includes the possibility of selecting audit procedures that are not appropriate to achieve the specific objective.

c.Sampling risk is derived from the uncertainty in applying audit procedures to specific risks.

d.Nonsampling risk arises from the possibility that, when a substantive test is restricted to a sample, conclusions might be different than if the auditor had tested each item in the population.

Explanation

Choice “a” is correct. Nonsampling risk includes all aspects of audit risk that are not due to sampling. It is always present and cannot be measured; the auditor can only attempt to reduce this risk to a very low level through adequate planning and supervision of the audit and quality control of all firm practices. Nonsampling risk can arise because an auditor failed to recognize misstatements in documents examined.

I don't understand the relation between question and answer explanation…the question asks about sampling risk and answer talks about non sampling risk…and what does it has to do with issuer and non issuer?

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

@gabe …hope i am not confusing u…but lowering acceptance risk means we are increasing sample size…so i thought a wud be right bcoz auditor is concerned about many differences …C doesn't look wrong to me..but A too felt right…oh god help me!!

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Gabe]

@Qlad, the question states what MAY the auditor do…so, like you were saying, A doesn't look wrong but C “felt” right- go with your gut 🙂

CPA, CFE
CISA- Experience will be completed by August 2016

[Gabe]

@Qlad I think they were just qualifying it by saying “nonissuer.” For that one, I would choose A just because B-D are wrong, process of elimination.

Or- does anyone else know if there is a difference in nonsampling risk between nonissuer and issuer? I don't think there is, but want to make sure

CPA, CFE
CISA- Experience will be completed by August 2016

[Qlad]

^ it looks to me like they are testing our hold on English language more than auditing concepts…lol.. to understand the meaning of the question is more difficult than the question it self..

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Gabe]

Yeah, that's been the hardest part for me too!

CPA, CFE
CISA- Experience will be completed by August 2016

[BEACPA]

Qlad,

Regarding the confusion between sampling risk and nonsampling risk. I had the same problem. Please refer to page A5-7, Nonsampling Risk. This should answer your question. 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!

[Anonymous]

Could someone clarify the difference between subject matter and written assertion.

Thanks!

[Gabe]

@BFF do you have any kind of reference?

CPA, CFE
CISA- Experience will be completed by August 2016

[NYCaccountant]

Ok, I've done 2 sims in the test bank for Engagements and got 100% on both, first time through. One of them was the simulation on ratios, which I understand for some weird reason. For those who have taken the exam, are ratios important? Just trying to focus on the important areas.

FAR - 93
REG - 87
BEC - 84!!!!
AUD - 99!!!!!! CPA exam complete.

[JamesBJames]

Wrapping up A3. Opened up A4 to see what all was in it and holy **** it's huge. I guess A5 and A6 are pretty small by comparison, but trying to do A4 in three days is going to be painful. Maybe I should extend it to four days. I'm calculating that it's gonna take me around 17 hours to do everything. Blegh.

For the Becker users, how long did you spend on A4?

FAR: May 1st, 2014 - 91
AUD: May 29th, 2014 - 97!
BEC: July 16th, 2014 - 91
REG: August 29th, 2014 - 88

Licensed December 2015

Feel free to add me on LinkedIn by clicking my username!

[Quinacridone]

Qaid,

Sampling risk is the risk that the results would have been different if the auditor had applied procedures to the entire population (as in, you have a population of 2.5 million transactions and then looked at each one to find an error rate of 22%, versus looking at a sample of the population and found an error rate of 9%). Since auditors cannot normally apply procedures to an entire population, we are forced to rely on samples and have to contend with our sample not being truly representative (I rarely do 100%, but have if the error rate is too high in an initial sample and can feasibly do the entire population using CAATTS or some other efficient method).

So to answer your question, by definition alone, B and C are wrong. Does that help?

It may be helpful to put the definition of each of the risks on a notecard and commit those to memory. It will greatly help with getting through AUD.

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!!)

[Author]

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