[jeff]

Welcome to the Q3 2017 CPA Exam Study Group for AUD. 🙂

Introduce yourselves and let your fellow NINJAs know when you plan to take your AUD exam.

The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

[Muhammad]

I can not get to DRS questions pls advice

[kmeadows]

@ryan I am using Wiley CPAExcel and I do not see any of those topics covered under the DOL lesson, except for ERISA, Employee Retirement Income Security Act. I wonder how concerned I should be…

[Lexi]

I didn't see much covered for DOL in Roger material either…HELP!!

[HoldMyBeerCPA]

There's very minimal detail about DOL that's covered in Roger. Though I have had a few NINJA MCQs on DOL type questions.

When those questions do come up I google search the question in hopes of finding some additional NINJA materials (NINJA book, etc.) that goes in depth about it. That strategy has worked for some topics, but not for others including DOL.

[jeff]

New podcast in case you missed it 🙂

Full Post: https://www.another71.com/cpa-exam-task-based-simulation-time-management/

[lampy44]

Question from Becker:

If the objective of test of details is to detect overstatement of sales, the auditor should trace transactions from…

Answer is:

Sales journal to cash receipts.

I thought tracing was from source documents to FS… wouldn't tracing from sales journal to cash receipts be vouching? I'm just confused with the verbiage. Thoughts?

[Andria – Another71]

REG Test Your Might! Be sure to answer on the FB thread to be eligible to win. HiYa!

[HoldMyBeerCPA]

@amlampert: From what I understand, the terms tracing and vouching are sometimes used interchangeably.

What it really comes down to is understanding the assertion that's being questioned and determining which flow of testing best fits that assertion.

Though I'm a bit puzzled by that answer. By chance do you have the other choices? I would think that testing for overstatements questions the existence assertion so we would trace/vouch items in the sales journal back to source documents, invoices, etc. not the cash receipts journal because there could be sales that are properly recorded but done on credit.

[jeff]

New Video:

Video: Recommended CPA Exam Study Hours

[jeff]

Video: Taking Too Many CPA Exam Notes

HIYA!

[Anonymous]

@amlampert: This may help with your question. In the Becker book it says when auditing asset/revenue balances, the auditor generally focuses on testing the existence assertion (rather than the completeness assertion) because assets are more likely to be overstated (existence) than understated (completeness). The auditor generally focuses on testing the completeness assertion for liability balances (or expenses), because liabilities are more likely to be understated than overstated.

So I think since the questions use tracing/vouching interchangeably it would be better to think of the assertion they are referring to and the account type. Since this question is asking about an asset/revenue balance being overstated it would be existence. The answer you put looks correct since it is starting with the sales journal going to the cash receipts.

[afrieband16]

Hi all,

I was wondering if anyone can help me with this confusing question.

SSARS guidance for compilations of unaudited financial statements establishes standards and procedures for which of the following engagements?

A. Assisting in adjusting the books of account for a partnership
B. Compiling an individual’s personal financial statements which will be used solely to assist the client and the client’s advisors to develop the clients’ personal financial goals
C. Processing financial data for clients of other accounting firms
D. Compiling an individual’s personal financial statements to be used to obtain a mortgage

The correct answer is D. I am not sure why it is not B. It was my understanding that compilations of personal financial statements could be prepared for client as long as it was understood by both parties that they were not going to be used to obtain credit and furthermore, they were to be used solely to help develop financial goals.

Does anyone have any idea why D is the correct answer?? the answer explanation did not make sense to me.

Thank you in advance!

[Lexi]

What are you guys taking as the final answer for how many years audit workpapers have to be kept for? Roger says 7, Ninja MCQ's say 5…

[nickbuko]

It's 5 years for non-issuers (AICPA) and 7 years for issuers (PCAOB)

[Lexi]

@nickbuko Thanks!!

[Author]

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