[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[Jsmith87]

I just took the AUD exam. Overall everything was fair. The MQ was pretty straightforward. I wasn't too confident with the Sims, but I did my best.

Unless I completely bombed the sims, I think I did enough to pass.

Good luck everyone.

[Anonymous]

@NYC goodluck! BEC was ok…I feel like I have a decent shot at passing but I'm not totally confident that I did. There were definitely a few questions I had to guess on but the writing part was really good at least!

[riceperson]

@JSMITH87. I'm sure you rocked it!

FAR 69, 83
AUD 85
BEC 80
REG 82
FINISHED

[Jsmith87]

Haha, thanks riceperson!

[riceperson]

Anyone can help me with this WTB IC sim?

It's the question where they give you the flow chart and you have to find out why something is not a deficiency or is a deficiency.

I did very well with the exception of Bookkeeper A

his flowchart is: “Receives sales order and shipping advice from warehouse clerk -> authorizes customer credit -> Prepares 3 copy invoice from approved customer list -> 1 copy to customer, the others to bookkeeper B.

I got

#8 wrong “Authorizes customers credit and prepares source documents for posting to customer accounts” I said it was not a deficiency and it actually is

#11 wrong “Authorizes write-offs of customer accounts receivable and authorizes customers' credit.” I said it wasn't a deficiency and it actually is

#12 wrong “Authorizes write-offs of customers accounts but does not post the sales journal.” I said it was a deficiency and it actually isn't

I apologize for those that don't have wtb.

Is 11 wrong because he should have both the job of writing off customer accounts and authorizing credit? That's the conclusion I came about, but if that's the case, why is 12 not a deficiency? Is it because writing off customer accounts is a comparison and posting is a record keeping duty?

And what about number 8? Should he just not be authorizing customer credit in the first place? But if that is the answer why is #12 not a deficiency.

Any guidance would help, WTB answer doesn't detail an explanation.

FAR 69, 83
AUD 85
BEC 80
REG 82
FINISHED

[Portia]

Hey All,

Can you all help me understand the answer to this Ninja MCQ Question #: 544 Category: 3B7 Perform Analytical Procedures:

“An auditor discovered that a client's accounts receivable turnover is substantially lower for the current year than for the prior year. This may indicate that:

Correct Answer: The accounts receivable turnover ratio is:

Net Credit Sales

---

Average Receivables

If the divisor (average receivables) of this ratio increases without a change in the net credit sales, the ratio would be lower. This situation would occur if the company did not properly cut off sales at the end of the year and recorded more in accounts receivable than should have been recorded.”

So my question is how can the divisor (avg rec) increase without the net credit sales increasing? In other words if avg rec increases because the cutoff is extended into the next yr then wouldn't net credit sales have to increase as well? So it would be impossible for avg rec to increase without net credit sales increasing. So I don't understand the presumption that net credit sales would not change.

Your help would be greatly appreciated. My exam is on Tuesday and I am losing confidence.

Portia

[Hunnsterr]

@riceperson:

A bookkeeper does not authorize customer credits. Authorizing customer credits is the responsibility of a credit manager.

Credit manager is also responsible for initiating write-offs, which should be approved/authorized by a treasurer.

So I guess that settles #8 and #11

I have no idea why #12 is not a deficiency. As per my understanding, a book keeper is required to post entries to the sales journal but cannot authorize customer write-offs since that is the job of a treasurer.

BEC - 88
REG - 72, 78
FAR - 75
AUD - 64, 64, 3rd attempt!!!

"A day of worry is more exhausting than a day of work" - John Lubbock

[Anonymous]

@hunnster: what exactly does a treasurer do? I have the impression they are mainly responsible for authorization?

[Hunnsterr]

@coocooper:

Yes the treasurer is mainly responsible for authorization (but not the authorization of customer credits)

In a sales cycle, a treasurer approves credit memos and approves write-offs of uncollectible accounts

In a purchase cycle, a treasurer signs the checks for payment

BEC - 88
REG - 72, 78
FAR - 75
AUD - 64, 64, 3rd attempt!!!

"A day of worry is more exhausting than a day of work" - John Lubbock

[funtiks]

A4 Simulation #1 where you have to analyze the ratios literally took me 2 hours to go over…

I hope I dont see this crap on the exam

FAR - 76*, 73, 85
BEC - 69, 72, 78*, 80
AUD - 72, 71, 90
REG - 71, 74, 85

AFTER 3 YEARS I'M DONE!!!

[Hunnsterr]

@ Portia:

You're absolutely correct in stating that accounts receivable and sales would both increase together. I spent a lot of time tearing my hair out thinking of situations where average receivables would increase while keeping net sales constant. It defies all logics :p

And then it struck me that the answer is probably talking about last year's accounts receivable (the opening accounts receivable in order to calculate the average receivables). So even if I wrongly overstated my opening accounts receivable because of improper cut offs, it would have no impact on my current year sales, but would still decrease the current turnover ratio.

Trust me, this answer wasn't properly explained. You were on the right track. So don't lose your confidence and keep yourself motivated

Good luck! 🙂

BEC - 88
REG - 72, 78
FAR - 75
AUD - 64, 64, 3rd attempt!!!

"A day of worry is more exhausting than a day of work" - John Lubbock

[Portia]

Thank you so much Hunnsterr!

I understand how the answer is possible now. I hope I do not get a question like this on the exam. It would totally blow my confidence apart.

I will be studying all day and posting questions. Will you be around?

Portia

[Hunnsterr]

@ Portia:

I'm sure you'll be fine. Stick to the basics and trust your instincts.

I'll be studying all day as well. Sure, I'll be happy to be of any help.

And I'll be coming up with a couple of my own doubts as well. Hope you can help me out too.

I'm a bit confused about gifts impairing independence. Does it depend on the materiality of the gift or is a straightforward “Yes gifts impair audit independence”??

BEC - 88
REG - 72, 78
FAR - 75
AUD - 64, 64, 3rd attempt!!!

"A day of worry is more exhausting than a day of work" - John Lubbock

[NYCaccountant]

Material gifts impair independence. Taking a client out to dinner is fine, taking a client on a world tour would probably impair independence.

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

[Hunnsterr]

Another Prof Ethics qs …

Would independence be impaired if a CPA's sibling is director of internal audit at the client?

I don't understand why independence would be impaired.

A sibling is a close relative, and a close relative needs to have a key position with client for the CPA's independence to be impaired.

Key position is defined as:

– supporting material composition of f/s

– preparation of f/s

– ability to exercise influence over contents of f/s

Does being a director of internal control give you control over all the above mentioned key position points?

BEC - 88
REG - 72, 78
FAR - 75
AUD - 64, 64, 3rd attempt!!!

"A day of worry is more exhausting than a day of work" - John Lubbock

[Author]

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