[jeff]

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

[Qlad]

ahhhh…my good ‘ol friend casagarber… thanks for the suggestion… i am barely making in 50s on Becker's ch 4 MCQ…can't understand the COVERU and assertions of mgmt at all…ratios are another set of battle for me…but this is making some logic now..thanks to u…

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

[Anonymous]

Ok so mgmt makes assertions about 3 main categories; balances, transactions and disclosures. There are a number of assertions for each of these categories. For balances mgmt makes assertions about presentation and disclosure, existence, rights and obligations, completeness and valuation/allocation. For transactions, mgmt makes assertions about occurrence, completeness, cutoff, classification and accuracy. For disclosures mgmt makes assertions about occurrence, completeness, classification and accuracy. This was also kinda hard for me to grasp as well…I think the key to this part is tons of MCQ…look for key words..ask yourself…what is the auditor trying to prove? When the auditor wants to validate the balance of a particular asset account..the concern is that assets are overstated….so in this case we are talking about mgmts assertion of existence…do these assets really exist? For Liabilities we are concerned that the client will understate them…so the assertion we look at is completeness…has the client included all of their liabilities on the B/S? For transactions we are worried about whether the transaction actually happened (occurrence) and if so whether it was recorded in the proper period (cutoff). For disclosure we are worried about whether the client has made the proper disclosures necessary..these are all just examples obviously but hopefully it will point you in the right direction.

[Anonymous]

Ok so mgmt makes assertions about 3 main categories; balances, transactions and disclosures. There are a number of assertions for each of these categories. For balances mgmt makes assertions about presentation and disclosure, existence, rights and obligations, completeness and valuation/allocation. For transactions, mgmt makes assertions about occurrence, completeness, cutoff, classification and accuracy. For disclosures mgmt makes assertions about occurrence, completeness, classification and accuracy. This was also kinda hard for me to grasp as well…I think the key to this part is tons of MCQ…look for key words..ask yourself…what is the auditor trying to prove? When the auditor wants to validate the balance of a particular asset account..the concern is that assets are overstated….so in this case we are talking about mgmts assertion of existence…do these assets really exist? For Liabilities we are concerned that the client will understate them…so the assertion we look at is completeness…has the client included all of their liabilities on the B/S? For transactions we are worried about whether the transaction actually happened (occurrence) and if so whether it was recorded in the proper period (cutoff). For disclosure we are worried about whether the client has made the proper disclosures necessary..these are all just examples obviously but hopefully it will point you in the right direction.

[Mia]

Woah this is such an info packed thread. I thought I was getting lost surfing the net when I should be studying but ended up reading posts here and I feel like I still studied. lol I'm having trouble with COVERU also although doing well on Becker's MCQs. Let's see if I stand a chance when I do MCQs a week from now with the Wiley testbank.

Does anyone here have experience with the Gleim Practice Exam for AUD? I got it and I'm not sure if I should take it already. I understand you could only take it one time. I still have 13 days till my test.

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]

Woah this is such an info packed thread. I thought I was getting lost surfing the net when I should be studying but ended up reading posts here and I feel like I still studied. lol I'm having trouble with COVERU also although doing well on Becker's MCQs. Let's see if I stand a chance when I do MCQs a week from now with the Wiley testbank.

Does anyone here have experience with the Gleim Practice Exam for AUD? I got it and I'm not sure if I should take it already. I understand you could only take it one time. I still have 13 days till my test.

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]

First thing to remember with COVERU is that, Completeness and Cut-Off stand alone. They don’t have siblings/twins. Valuation does. It goes out with Allocation & Accuracy. Existence is paired with Occurrence while Rights is with Obligation & Understandability with Classification. I memorized their sequence even without really understanding them at first. By working through several MCQs, I slowly learned them bit by bit.

I have never done any audit job but I think of audit as CPA going to the house of a client.

Basically, the house has a roof (top/upper portion) and foundation (lower ground).

I think of a roof as FS of the company, accounting, ledger, journal entries, name it. Anything that’s already included in FS is part of the information (on top of the roof), that’s for sure!

I think of foundation as the source documents, count sheets, tally sheets, any kind of sheets that we are not sure if they are already included in the FS or not.

Completeness & Existence assertions deal with where we should start investigating. Using the words tracing and vouching adds confusions at times because some questions use them interchangeably. Tracing is going up and vouching is going down. But I’ve seen some questions that use tracing from up to bottom too. So tracing and vouching are just one of the standard audit procedures which could be replaced with words like tracking, checking, drawing, examining, etc.

We just have to put FS on top and source documents at the bottom, like this:

FS

I

I

I

I

I

Source Documents

If a question implies that an investigation is starting from source documents to FS, that’s a clue the procedure is going up. Okay, that’s completeness right there. Let me make the bar arrow going up then.

If a question implies that a review tracks from FS down to source document, that’s checking for existence. I can make the arrow going down then.

FS are NOT statement of facts. They are management’s claims and assertions.

Mgt: Hello, CPA! Could you please audit our FS with our assertions of COVERU?

CPA: Let me see your FS.

Mgt: Completeness > We have included all the information that has to be in the FS. For example, our liability to ABC Company is only $10,000.

CPA: Hmm, with professional skepticism asks himself, “Did the company declare all the loans and items that should be in their FS? Let me investigate some more to make sure it’s only $10k. Maybe it’s $15k or $20k or more than that?

On investigating the mgt.'s assertion of completion, the CPA wants to make sure all accounts/transactions/disclosures are complete, nothing is excluded or nothing has been missed out. With the simple example I gave, we don't need to investigate what's in $10k (since it is already declared in the FS). What we need to know is if there are $1k or 2k or 3,4,5 6k missing on that particular item. That's the reason we have to dig (or trace/track/check) from the bottom, or any of the appropriate source documents.

Oh well, this is the way I teach my conscience what to believe about completeness.

If you want to me to continue with the remaining assertions, just let me know @Qlad.

If I’m merely adding confusions, I can stop from here. LOL.

[Anonymous]

First thing to remember with COVERU is that, Completeness and Cut-Off stand alone. They don’t have siblings/twins. Valuation does. It goes out with Allocation & Accuracy. Existence is paired with Occurrence while Rights is with Obligation & Understandability with Classification. I memorized their sequence even without really understanding them at first. By working through several MCQs, I slowly learned them bit by bit.

I have never done any audit job but I think of audit as CPA going to the house of a client.

Basically, the house has a roof (top/upper portion) and foundation (lower ground).

I think of a roof as FS of the company, accounting, ledger, journal entries, name it. Anything that’s already included in FS is part of the information (on top of the roof), that’s for sure!

I think of foundation as the source documents, count sheets, tally sheets, any kind of sheets that we are not sure if they are already included in the FS or not.

Completeness & Existence assertions deal with where we should start investigating. Using the words tracing and vouching adds confusions at times because some questions use them interchangeably. Tracing is going up and vouching is going down. But I’ve seen some questions that use tracing from up to bottom too. So tracing and vouching are just one of the standard audit procedures which could be replaced with words like tracking, checking, drawing, examining, etc.

We just have to put FS on top and source documents at the bottom, like this:

FS

I

I

I

I

I

Source Documents

If a question implies that an investigation is starting from source documents to FS, that’s a clue the procedure is going up. Okay, that’s completeness right there. Let me make the bar arrow going up then.

If a question implies that a review tracks from FS down to source document, that’s checking for existence. I can make the arrow going down then.

FS are NOT statement of facts. They are management’s claims and assertions.

Mgt: Hello, CPA! Could you please audit our FS with our assertions of COVERU?

CPA: Let me see your FS.

Mgt: Completeness > We have included all the information that has to be in the FS. For example, our liability to ABC Company is only $10,000.

CPA: Hmm, with professional skepticism asks himself, “Did the company declare all the loans and items that should be in their FS? Let me investigate some more to make sure it’s only $10k. Maybe it’s $15k or $20k or more than that?

On investigating the mgt.'s assertion of completion, the CPA wants to make sure all accounts/transactions/disclosures are complete, nothing is excluded or nothing has been missed out. With the simple example I gave, we don't need to investigate what's in $10k (since it is already declared in the FS). What we need to know is if there are $1k or 2k or 3,4,5 6k missing on that particular item. That's the reason we have to dig (or trace/track/check) from the bottom, or any of the appropriate source documents.

Oh well, this is the way I teach my conscience what to believe about completeness.

If you want to me to continue with the remaining assertions, just let me know @Qlad.

If I’m merely adding confusions, I can stop from here. LOL.

[Anonymous]

For tracing and vouching I remember it this way;

Tracing = Completeness – Source Documents to Financial Statements

Vouching = Existence – Financial Statements to Source Documents

T comes before V and C comes before E.

Hope this helps.

[Anonymous]

For tracing and vouching I remember it this way;

Tracing = Completeness – Source Documents to Financial Statements

Vouching = Existence – Financial Statements to Source Documents

T comes before V and C comes before E.

Hope this helps.

[Qlad]

Wow @ Casagarber and amordiva…

i am starting to get the logic …please keep going whenever u have time…i did not check the thread since morning in my tension to understand COVERU….I got the Completeness and i do get Existence a little bit…all others are very confusing….

Thank you very much…

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

[Qlad]

Wow @ Casagarber and amordiva…

i am starting to get the logic …please keep going whenever u have time…i did not check the thread since morning in my tension to understand COVERU….I got the Completeness and i do get Existence a little bit…all others are very confusing….

Thank you very much…

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

[peetree]

Tickmarks guys…

Do I need to know them that well other than why, as auditors, we tickmark things?

Becker, glanced over them but I saw a full on sim in Wiley. Thoughts?

FAR 02/21/13 - 95
REG 07/02/13 - 87
AUD 08/02/13 - 94
BEC 08/30/13 - 85
Ethics Exam - 90

Illinois candidate awaiting his license

Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

[peetree]

Tickmarks guys…

Do I need to know them that well other than why, as auditors, we tickmark things?

Becker, glanced over them but I saw a full on sim in Wiley. Thoughts?

FAR 02/21/13 - 95
REG 07/02/13 - 87
AUD 08/02/13 - 94
BEC 08/30/13 - 85
Ethics Exam - 90

Illinois candidate awaiting his license

Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

[Anonymous]

I don't remember seeing anything about tickmarks in my review material…someone can correct me if I'm wrong but I'm pretty sure tickmarks can very from firm to firm…and auditors out there? Can you verify this?

[Anonymous]

I don't remember seeing anything about tickmarks in my review material…someone can correct me if I'm wrong but I'm pretty sure tickmarks can very from firm to firm…and auditors out there? Can you verify this?

[Author]

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