[jeff]

Welcome to the Q2 2017 CPA Exam Study Group for AUD. 🙂

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

[Mike]

Question 245 is flat wrong. Here it is:

Which of the following statements most likely represents a disadvantage for an entity that keeps microcomputer-prepared data files rather than manually prepared files?

A. Attention is focused on the accuracy of the programming process rather than errors in individual transactions.

B. It is usually easier for unauthorized persons to access and alter the files.

C. Random error associated with processing similar transactions in different ways is usually greater.

D. It is usually more difficult to compare recorded accountability with physical count of assets.

The questioners claim that the correct answer is B, as if it's easier to get around passwords and access requirements than it is to just open a drawer with a bunch of papers in it. Maybe in 1975, when all files were on unencrypted floppy disks this was true, but not anymore.

[julyaf1207]

@michael

I think the point is with the Computer file literally everybody in the whole world can gain access to it because they can do it from any computer. Where as if they were physical files you can only get them from that storage location and can use better physical controls as well.

[midnightbuck]

I get the line of thinking, but I agree it's a terrible question. If you asked 100 people whether it was easier to hack into a company's internal database or break into their storage facility you'd get at least 50/50 answer.

[Apii]

@julyaf1207

Without revealing much can you share about new exam focus areas and how was your sims? Any special tip

[julyaf1207]

Hi @ranju_n !

This was my first time taking auditing so I can't really say much as to how audit specifically changed but I can only compare FAR pre change to auditing yesterday and other than the obviously format changes with number of questions and that I honestly saw no difference. I actually thought the sims were……. not easier but…….more relevant. They were still challenging and required some thought. But I think they did a good job of testing the overall knowledge “did you get the picture” rather than did you study this specific topic all the way down to the itty gritty detail. If that makes sense!?

Also, personal opinion tip. Especially after taking the exam. At least for me, spending hours on the sims in studying is a waste of time. Spend more time to get to Know the material. If you know the material well the sims will be ok. I spent about 3 hours TOTAL on 1 day at the end of my review doing simulations mostly just to check out formatting. I'm pretty sure I nailed 4 of the 8 and felt pretty good on 2 of the remaining 4. If you have infinite time the practice simulations are great but most of us are on a time crunch and can't afford to spend time doing things that don't help!!! After taking 3 of the 4 I definitely think time is better spent working MCQs.

Hope this helps!

[kenckang]

@julyaf1207 regarding the simulations – that makes sense. the updated exam is supposed to test more on comprehensive overall knowledge. evaluating and analysis.

[Anonymous]

According to my review materials, there are circumstances where an auditor will perform an audit despite a lack of independence:

If GAAS provides for circumstances that allow the auditor to accept the engagement
The auditor is required by law or regulation to accept the engagement

Can someone please explain the aforementioned to me? I've spent time getting the different scenarios where independence would be impaired in my brain.

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[Mo]

Studying for Aud. Failed once already. Should I buy Becker flash cards? Are they helpful?

[IwannabeaCPA2017]

@Mo The New Becker have flashcards included I believe. I doubt they are useful. I would much more prefer Ninja MCQ or just do more progress test etc.

I just reflected these past 30 mins on why I keep failing. My study habit sucks and I'm not willing to sacrifice my “fun” time for these exams. Still got time to catch up but I am 2 chaps behind on Becker with an exam date in a month. Y'all gonna be hearing from me a lot more over the next few weeks on here LOL.

[julyaf1207]

@Mo

No!!!!! I would highly advise not buying the Becker flash cards. They are worthless in my opinion. Spend your money on something else. They are almost literally the textbook written on 3×5 cards. Nearly every card has a whole paragraph on the back. I make my own for what I need. Then you learn while you make them and while you study them. Plus self made ones are understandable as I find the Becker ones drawn out and confusing.

[saraw]

Totally agree with the others. The Becker flash cards are a waste of time. I thought it'd be a great idea to use those to study and got a 74 on AUD. This time around, I've used the Ninja ten point combo and feel SO much more prepared. If you need quick bullet points similar to what a flash card gives you, if highly recommend you use the Ninja notes. As mentioned above, the Becker flash cards have huge paragraphs on the back.

[Teal]

Does anyone have a good overview of what rules govern issuers and non-issuers and then everything that falls underneath? I am looking for like just a skeletal outline of each.

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[mardybum13]

Whats the course of action in each of these – get management to disclose in the financial statements? get them to accrue for the liability/loss? update the audit report?

a) A contingency about a bad debt (customer going bankrupt) that has been disclosed in the financial statements, has now resolved. The resolution occurred before the date the audit report was issued but this information has come to light after the audit report was issued.

b) A contingency about a pending litigation is resolved that was not disclosed in the financial statements. This event occurred after the date of the audit report.

[Anonymous]

A) Update the audit report
B) that's a hard one…I'm wondering if the contingency resulted in the client having to pay out anything? My best guess is to have management to disclose in the financial statements.

I'm tired of operating in fear and mediocrity. It's time to try. It's time to do. It's time to go.

[j3cpa]

mardybum13:

1. A going concern matter that has been resolve (after the Financial Statement end but before the audit report date is issued) will allow the auditor to issue an unmodified opinion.

2. Depend on the requirement of the contingency. Sometimes a company don't have to disclose the contingency. In an event that they have to disclose it but they didn't, that's a GAAP issue regarding inconsistency – emphasis of the matter.

A contingency that they don't ‘have to disclose but is resolve after the audit report date – no responsibility on the CPA. A contingency that they HAVE to disclose and disclosed on the F/S but is resolve after the audit report date – I don't think the auditor is responsible for updating the report.

Anybody have any thoughts on this? This audit report issue is so confusing for me. I'm trying to think it out Mardybum13 so I can understand it better myself too.

Original Question:
Whats the course of action in each of these – get management to disclose in the financial statements? get them to accrue for the liability/loss? update the audit report?

a) A contingency about a bad debt (customer going bankrupt) that has been disclosed in the financial statements, has now resolved. The resolution occurred before the date the audit report was issued but this information has come to light after the audit report was issued.

b) A contingency about a pending litigation is resolved that was not disclosed in the financial statements. This event occurred after the date of the audit report.

Study Material:
GLEIM
BEC - FEB/2012
AUD - FEB/2012
FAR - JULY/2012
REG - JULY/2012

[Author]

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