[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]

congratulations @nick!

[shankysays]

@cpastudent22, Roger uses a mnemonic for substantive testwork – ICORIIA – and the last “I” is inspection of documents, which is what I would think inspection of payroll tax returns is. You're comparing the amount on the returns to the payroll expense amount recorded by the client, which is a test of balance, rather than a test of controls.

Found out I passed FAR today, so I'm going to allow myself a mini-celebration tonight, but I have to study HARD this weekend as it's my last one before AUD next Saturday and I haven't even gotten through all the material yet – eek!

BEC - 72, 82! ✓
FAR - 80! ✓
AUD - 70, 92! ✓
REG - 74, 78! ✓

Licensed CPA 5/2015

[wallybally]

I'm confused about reporting on internal control. Can someone tell me if my statement below is correct or not?

PCAOB requires issuers to go through an integrated audit, which includes issuing a report with an opinion on the effectiveness of internal control over financial reporting. The auditor can issue a disclaimer of opinion if there is a scope limitation or an adverse opinion if a material weakness exists. The auditor need not disclose specific significant deficiencies in the report but must identify them in writing to the BOD and managers.

Certain entities that fall under GAGAS's jurisdiction must have an audit over financial reporting and compliance. The auditor must issue an opinion over compliance and provide negative assurance on the effectiveness of internal control over compliance. The internal control report must disclose all instances of material weaknesses and significant deficiencies. The auditor can issue an adverse opinion if a material weakness exists or a disclaimer of opinion if a scope limitation exists.

Also, can the auditor ever issue a qualified opinion on the effectiveness of internal control? If so, under what circumstances?

FAR - 86 (July 2014)
AUD - 85 (Aug 2014)
REG - 80 (Oct 2014)
BEC - 81 (Nov 2014)

I'm done!!!!

[Anonymous]

My take on issuers is that if the ICs, even if F'd up dont lead to misstated F/Ss, it isn't a problem. Can issue an unmodified report but need to tell those charged with governance.

“Also, can the auditor ever issue a qualified opinion on the effectiveness of internal control? If so, under what circumstances?” I don't see how they could for issuers. If CR is set to max, they just have to do more substantive tests.

[wallybally]

That's true for the opinion on financial statements, but I thought that issuers are required to have a report on their internal controls, which is restricted to be used by only those charged with governance and managers. Technically, the issuer can get an unmodified opinion on the financials, but an adverse opinion on the internal control if a material weakness exists.

FAR - 86 (July 2014)
AUD - 85 (Aug 2014)
REG - 80 (Oct 2014)
BEC - 81 (Nov 2014)

I'm done!!!!

[Ssbknyc]

@wallybally Issuers are required to have a report on their internal controls, however, this report is not restricted. When non issuers have an integrated audit the internal control report is restrictive.

My understanding regarding Government audits, an auditor will include in the report the results of the auditor's test of controls but will not express an opinion on the effectiveness of internal control over compliance.

Done 08/2014-08/2015

[wallybally]

@Ssbknyc. Thanks for clarifying! That helps a lot 🙂

So, the internal control reports that are restrictive are for non issuers and governments?

FAR - 86 (July 2014)
AUD - 85 (Aug 2014)
REG - 80 (Oct 2014)
BEC - 81 (Nov 2014)

I'm done!!!!

[Ssbknyc]

Yes, but remember for Govt audits, auditors do not express an opinion on the effectiveness of internal control.

Done 08/2014-08/2015

[Anonymous]

This is pretty concise and lays it all out

https://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_5.aspx#reportingoninternalcontrol

[wallybally]

So, basically, the government audits just say we didn't find anything bad, or if they do find material weaknesses or significant deficiencies, they say it in the report?

FAR - 86 (July 2014)
AUD - 85 (Aug 2014)
REG - 80 (Oct 2014)
BEC - 81 (Nov 2014)

I'm done!!!!

[Ssbknyc]

I believe that is correct. Also i just want to mention there is an exception to that General rule (for Govt audits, auditors do not express an opinion on the effectiveness of internal control) Auditors may be required to express an opinion on the operating effectiveness of internal controls during a Govt audit if a) it is required by the governmental audit requirements b) substantive tests alone do not provide enough evidence to support the conclusion of the Government audit c) the auditors risk assessment includes that they expect the operating effectiveness of controls over compliance.

So think of it this way during Govt audits, an auditor report will state the scope of their tests on internal controls but will not express an opinion on the effectiveness of internal control unless a, b or c above. The report is restrictive use even if a,b,c above is not applicable.

Done 08/2014-08/2015

[Anonymous]

So I get my results tomorrow, but does anyone else find the research problems very difficult for Audit? For FAR they are simple, but I just can't ever find what I'm looking for in AUD. And I got two research problems both times that I took the test.

[Anonymous]

I'm just wondering…what is the average trending score for AUD on Ninja MCQs?

[wallybally]

Thank you @Ssbknyc!!!

FAR - 86 (July 2014)
AUD - 85 (Aug 2014)
REG - 80 (Oct 2014)
BEC - 81 (Nov 2014)

I'm done!!!!

[willpassby2014]

Before accepting an engagement to audit a new client, a CPA is required to obtain:

A.

an assessment of fraud risk factors likely to cause material misstatements.

Incorrect B.

an understanding of the prospective client's industry and business.

C.

the prospective client's signature to a written engagement letter.

D.

the prospective client's consent to make inquiries of the predecessor, if any.

I selected first D and then B. What do you guys think. Is the question properly worded or i am dumb?

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Author]

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