[jeff]

AUD Resources:

Free AUD Notes & Audio – https://www.another71.com/cpa-exam-study-plan

AUD 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

AUD Score Release: https://www.another71.com/cpa-exam-scores-results-release

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

[silliepanda]

Anyone who has NEVER done an audit for work and passed the exam … any tips? This is my worst exam area and I am just having a hard time jumping in.

BEC - TOO MANY FAILS TO LIST! July 2015 I WILL GET IT!
AUD - AUG 2015- NEVER PASSED!
FAR - LOST CREDIT
REG - PASSED

[pnielsen1982]

I just scheduled for AUD on August 31st. This is my first section, so I'm curious to see how it goes. I am doing AUD first because I feel like it is the section that I will have the hardest time with, as so much of it is judgement based, and because I'm finishing school on August 2nd and am currently in an Auditing class.

I have purchased CPAExcel and will start studying on August 7th. If anyone else is looking at the same time frame and/or approach, hit me up.

Good luck to everyone!!

CA licensed CPA

AUD - 08/31/13 - 84
BEC - 11/26/13 - 84
FAR - 08/10/14 - 85
REG - 11/30/14 - 72, 02/20/15 - 87

What have I gotten myself into?

[pnielsen1982]

I just scheduled for AUD on August 31st. This is my first section, so I'm curious to see how it goes. I am doing AUD first because I feel like it is the section that I will have the hardest time with, as so much of it is judgement based, and because I'm finishing school on August 2nd and am currently in an Auditing class.

I have purchased CPAExcel and will start studying on August 7th. If anyone else is looking at the same time frame and/or approach, hit me up.

Good luck to everyone!!

CA licensed CPA

AUD - 08/31/13 - 84
BEC - 11/26/13 - 84
FAR - 08/10/14 - 85
REG - 11/30/14 - 72, 02/20/15 - 87

What have I gotten myself into?

[Anonymous]

I copied/pasted a MCQ with complete explanations below related to Service Organizations on IC. I answered it incorrectly because I overlooked the direct question in considering the user auditor’s satisfactory report for the service auditor. All I remembered was the user auditor’s option to perform TOCs at the service organization. However, Option D below specifically mentions “user auditor who has not been hired to audit the service organization CANNOT TEST SERVICE ORGANIZATION’S CONTROLS.”

That’s clear enough to me.

But Becker’s AUD-B-A3-P.65 reads as follows:

Type 2 Report: Alternatively, such evidence (to allow reduction in assessed risk) can be obtained directly by the user auditor, either by testing the user organization’s controls over the service organization’s activities, or by PERFORMING TEST OF CONTROLS AT THE SERVICE ORGANIZATION.

Now my question is, when can the service auditor be allowed to perform test of controls at the service organization?

Green, CPA, is auditing the financial statements of Ajax Co. Ajax uses the DP Service Center to process its payroll. DP's financial statements are audited by Blue, CPA, who recently issued a report on DP's policies and procedures regarding the processing of other entity's transactions. In considering whether Blue's report is satisfactory for Green's purposes, Green should:

a. Assess control risk at the maximum level.

b. Review the audit programs followed by Blue.

c. Make inquiries concerning Blue's professional reputation.

d. Perform tests of controls at the DP Service Center.

Explanation

Choice “c” is correct. In considering whether the service auditor's (Blue, CPA) report is satisfactory for the user auditor (Green, CPA); the user auditor should make inquiries concerning the service auditor's reputation.

Choice “a” is incorrect. Green would assess control risk only after considering the combined evidence provided by the service auditor's report and the user auditor's own procedures and other factors. The assessment of control risk is irrelevant in Green's consideration as to whether the service auditor's (Blue, CPA) report is satisfactory for Green.

Choice “b” is incorrect. The user auditor (Green, CPA) has access to the report issued by the service auditor (Blue, CPA), but would not have access to the audit programs followed by the service auditor.

Choice “d” is incorrect. Green, CPA has been hired to audit the financial statements of Ajax Co. and therefore may test Ajax's controls. Green has not been hired to audit DP Service Center and therefore cannot test DP's controls. The only information Green has related to DP's controls is the report issued by Blue, CPA. In considering whether the service auditor's (Blue, CPA) report is satisfactory for the user auditor (Green, CPA); the user auditor should make inquiries concerning the service auditor's reputation.

[Anonymous]

I copied/pasted a MCQ with complete explanations below related to Service Organizations on IC. I answered it incorrectly because I overlooked the direct question in considering the user auditor’s satisfactory report for the service auditor. All I remembered was the user auditor’s option to perform TOCs at the service organization. However, Option D below specifically mentions “user auditor who has not been hired to audit the service organization CANNOT TEST SERVICE ORGANIZATION’S CONTROLS.”

That’s clear enough to me.

But Becker’s AUD-B-A3-P.65 reads as follows:

Type 2 Report: Alternatively, such evidence (to allow reduction in assessed risk) can be obtained directly by the user auditor, either by testing the user organization’s controls over the service organization’s activities, or by PERFORMING TEST OF CONTROLS AT THE SERVICE ORGANIZATION.

Now my question is, when can the service auditor be allowed to perform test of controls at the service organization?

Green, CPA, is auditing the financial statements of Ajax Co. Ajax uses the DP Service Center to process its payroll. DP's financial statements are audited by Blue, CPA, who recently issued a report on DP's policies and procedures regarding the processing of other entity's transactions. In considering whether Blue's report is satisfactory for Green's purposes, Green should:

a. Assess control risk at the maximum level.

b. Review the audit programs followed by Blue.

c. Make inquiries concerning Blue's professional reputation.

d. Perform tests of controls at the DP Service Center.

Explanation

Choice “c” is correct. In considering whether the service auditor's (Blue, CPA) report is satisfactory for the user auditor (Green, CPA); the user auditor should make inquiries concerning the service auditor's reputation.

Choice “a” is incorrect. Green would assess control risk only after considering the combined evidence provided by the service auditor's report and the user auditor's own procedures and other factors. The assessment of control risk is irrelevant in Green's consideration as to whether the service auditor's (Blue, CPA) report is satisfactory for Green.

Choice “b” is incorrect. The user auditor (Green, CPA) has access to the report issued by the service auditor (Blue, CPA), but would not have access to the audit programs followed by the service auditor.

Choice “d” is incorrect. Green, CPA has been hired to audit the financial statements of Ajax Co. and therefore may test Ajax's controls. Green has not been hired to audit DP Service Center and therefore cannot test DP's controls. The only information Green has related to DP's controls is the report issued by Blue, CPA. In considering whether the service auditor's (Blue, CPA) report is satisfactory for the user auditor (Green, CPA); the user auditor should make inquiries concerning the service auditor's reputation.

[Anonymous]

Hi, I'm using Becker, NINJA Audio, and NINJA Flashcards.

On the simulations in Becker, I was wondering if anybody had some tips on best ways to approach this part?

[Anonymous]

Hi, I'm using Becker, NINJA Audio, and NINJA Flashcards.

On the simulations in Becker, I was wondering if anybody had some tips on best ways to approach this part?

[Mia]

@ajparr1984 I took AUD last month. I failed but when I got my score report I was stronger in sims (weaker in MCQs due to going through them so fast and carelessly).

This was what I did – everytime I answered MCQs in the Wiley Testbank, I had the professional literature opened in another browser. It would take me a while longer to answer MCQs but at least I was getting practice. As Jeff said, a sim is really just a bunch of MCQs put together if you think about it.

If you don't have access to that, request it here: https://www.aicpa.org/BecomeACPA/CPAExam/ForCandidates/HowToPrepare/Pages/literature.aspx

It's very similar to the AL in the exam.

So when I was doing MCQs, if I didn't know the answer, I would search for it in the professional literature. I think I got used to searching. As you've probably heard a lot of times, the key to AUD Simulations is knowing how to search for stuff in the AL.

BEC 82 Nov 2012 | REG 80 Feb 2013 | FAR 76!!! Apr 2013 | AUD 69 May 2013 | AUD 83!!! Aug 2013

Done!! Thanks Jeff & A71 friends!

Ad maiorem Dei gloriam - For the greater glory of God!

[Mia]

@ajparr1984 I took AUD last month. I failed but when I got my score report I was stronger in sims (weaker in MCQs due to going through them so fast and carelessly).

This was what I did – everytime I answered MCQs in the Wiley Testbank, I had the professional literature opened in another browser. It would take me a while longer to answer MCQs but at least I was getting practice. As Jeff said, a sim is really just a bunch of MCQs put together if you think about it.

If you don't have access to that, request it here: https://www.aicpa.org/BecomeACPA/CPAExam/ForCandidates/HowToPrepare/Pages/literature.aspx

It's very similar to the AL in the exam.

So when I was doing MCQs, if I didn't know the answer, I would search for it in the professional literature. I think I got used to searching. As you've probably heard a lot of times, the key to AUD Simulations is knowing how to search for stuff in the AL.

BEC 82 Nov 2012 | REG 80 Feb 2013 | FAR 76!!! Apr 2013 | AUD 69 May 2013 | AUD 83!!! Aug 2013

Done!! Thanks Jeff & A71 friends!

Ad maiorem Dei gloriam - For the greater glory of God!

[Qlad]

I am on ch 2 of becker….want to confirm

1. Is Emphasis of matter para and Basis for opinion para are same? I mean are they there to discuss any matter regarding the financial stmnts or the report? if not , what is the difference?

2. When does this para comes before opinion and when, after opinion?

PLEEEEEESE HELLP….it's all getting mixed up

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

[Qlad]

I am on ch 2 of becker….want to confirm

1. Is Emphasis of matter para and Basis for opinion para are same? I mean are they there to discuss any matter regarding the financial stmnts or the report? if not , what is the difference?

2. When does this para comes before opinion and when, after opinion?

PLEEEEEESE HELLP….it's all getting mixed up

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

[Mia]

Qlad: I don't think they're the same.

Basis for Modified Opinion usually explains why the opinion is modified. For a crude example, it might say “The company's FS do not disclose the bla bla bla.. In our opinion, this is necessary”

EOM, on the other hand, just emphasizes matters (not necessarily those discussed in the basis paragraph) that the auditor feels the users should know. More info on EOM here https://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-C-00706.pdf

BEC 82 Nov 2012 | REG 80 Feb 2013 | FAR 76!!! Apr 2013 | AUD 69 May 2013 | AUD 83!!! Aug 2013

Done!! Thanks Jeff & A71 friends!

Ad maiorem Dei gloriam - For the greater glory of God!

[Mia]

Qlad: I don't think they're the same.

Basis for Modified Opinion usually explains why the opinion is modified. For a crude example, it might say “The company's FS do not disclose the bla bla bla.. In our opinion, this is necessary”

EOM, on the other hand, just emphasizes matters (not necessarily those discussed in the basis paragraph) that the auditor feels the users should know. More info on EOM here https://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-C-00706.pdf

BEC 82 Nov 2012 | REG 80 Feb 2013 | FAR 76!!! Apr 2013 | AUD 69 May 2013 | AUD 83!!! Aug 2013

Done!! Thanks Jeff & A71 friends!

Ad maiorem Dei gloriam - For the greater glory of God!

[Anonymous]

@Qlad, EOM &/or OM Paragraph/s AND Basis for modification {BFM}Paragraph are NOT the same.

EOM/OM paragraphs [following the opinion paragraph] are or may be required in unmodified auditor's report. [See Becker's AUD-B Pp. A1-23-25]

BFM paragraphs [preceding the opinion paragraph] are used when auditors render qualified, adverse & disclaimer of opinion. [See Beckers AUD-B Pp. A1-31-37].

Yes I agree, it's so easy to get mixed up with them. What I did was I gleaned from those pages of A1 and wrote the various situations when a certain paragraph is required and when it deems necessary based on the auditor's assessment/judgment. I would still get some incorrect answers during progress tests but it's good to keep practicing and learning my mistakes then get them right next time.

Good luck to all of us!

P.S.

I think we can also use OM paragraphs for modified reports when stating restrictions or describing situations relevant to the users' understanding of the audit like referring to the prior audit's different opinion/date/reason/changes.

[Anonymous]

@Qlad, EOM &/or OM Paragraph/s AND Basis for modification {BFM}Paragraph are NOT the same.

EOM/OM paragraphs [following the opinion paragraph] are or may be required in unmodified auditor's report. [See Becker's AUD-B Pp. A1-23-25]

BFM paragraphs [preceding the opinion paragraph] are used when auditors render qualified, adverse & disclaimer of opinion. [See Beckers AUD-B Pp. A1-31-37].

Yes I agree, it's so easy to get mixed up with them. What I did was I gleaned from those pages of A1 and wrote the various situations when a certain paragraph is required and when it deems necessary based on the auditor's assessment/judgment. I would still get some incorrect answers during progress tests but it's good to keep practicing and learning my mistakes then get them right next time.

Good luck to all of us!

P.S.

I think we can also use OM paragraphs for modified reports when stating restrictions or describing situations relevant to the users' understanding of the audit like referring to the prior audit's different opinion/date/reason/changes.

[Author]

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