[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

[Anonymous]

Question: Are engagement letters required for audits and reviews?

My school coursebook says engagement letters are not required nor is obtaining the client's signature on the engagement letter.

[Anonymous]

Engagement letters for compilations & reviews are presumptively mandatory…i.e. not technically required. An auditor is required to establish an understanding with management and has to document the understanding but an engagement letter isn't required to document it.

[greg422]

same for an audit right? You don't technically need an engagement letter, but just something in writing?

REG - 82
AUD - 97
BEC - 81
FAR - 84
DONE!

[Anonymous]

Right- an “engagement” letter is not required but some form of written agreement is for an audit.

[Anonymous]

It's such a good feeling to get through all the material and see 100% completed in Becker! Now to start the review process. I'm so thankful I don't have to cram any more info into my brain…just gotta make sure I remember it all!

Anyone sitting for the exam this coming week?

[Ssbknyc]

What do you all do to review? I am taking the exam on the 24th and went through all the Becker material. I keep doing mcq and reviewing simulations but not sure if I should reread chapters.

Done 08/2014-08/2015

[Anonymous]

Can someone please explain this?

If the assessed level of fraud risk is high, the auditor should attempt to reduce detection risk.

[Anonymous]

@cpastudent If the assessed level of fraud risk is high, the auditor would reduce the acceptable detection risk. If the acceptable detection risk is low, they would perform more testing.

[Anonymous]

thanks @Amanda_88

Another question:

What is the difference between test of details vs substantive testing?

I was under the impression that substantive testing is the same as test of details.

[Ssbknyc]

@cpastudent Detection Risk is how likely an auditor will detect a misstatement due to error or fraud. Auditors want this risk to be as high as possible. If there is fraud, it is much harder to detect a misstatement, therefore, detection risk becomes lower. When detection risk gets lower the auditor wants to perform a more thorough audit with more procedures.

Done 08/2014-08/2015

[Anonymous]

Test of details is a type of substantive testing. Basically, auditing is broken into test of controls and substantive testing (aka numbers testing).

Within substantive testing, you have test of details and analytical procedures. Test of details is when you're digging into specific transactions in a balance or verifying the balance of an account. So, when you're selecting a sample of fixed asset additions to vouch or verifying AR balances via confirmations, thats test of details.

[FLCPA1969]

I have CPAEXCEL, I was wondering if anyone has any advice if I should take all of the MCQ's in order or do them randomly?

Thanks!!!!!!!!!!!

[Anonymous]

Question:

To assess control risk, you obtain an understanding of the client's internal controls and decide if they are weak or strong. if they are weak, you don't rely on it and go straight to substantive testing. if they are strong, you perform test of controls and decide on the level of substantive testing to do. (Is this correct?)

However, for public companies, are TOCS required, regardless of weak or strong internal controls? So, if the auditor does not plan to rely on weak i/c, they must perform TOCS regardless due to SOX?

[Anonymous]

They have to test controls but not for the purpose of using them to reduce substantive testing. Only to express an opinion on the IC system

[Anonymous]

is anyone else worryingly fast at doing AUD questions? I just took my first practice exam, got an 89% so I'm feeling pretty good about my test on Wednesday, but, well, it took me a grand total of…35 minutes…

I know I wouldn't be that quick on “fresh” questions. I know some of that speed is due to memorizing at least a handful of the MCQs, but I really tried to adjust my speed to compensate, making sure I read the question and each answer slowly and explaining why the correct answer is correct if it's a difficult question. yet, 90 MCQs and 7 sims done in just over half an hour? this is how my audit class in college went down, I finished my exams in like 15 minutes for an exam I had an hour and a half to complete, but come on now, this is the CPA exam…

[Author]

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