[jeff]

Welcome to the Q4 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/

[Sir Plus]

Hey Vinti,

Nice job on the lectures… On Roger I've watched 65% of lecture, read half of the book, and have attempted about 1/3 of the total MCQs. (I've also taken time off of work for this exam, which is why I've been able to move so quickly through the review course).

I'm trying to read the entire book, as that helps me reinforce the lecture concepts. Some ppl think it's a waste of time tho, idk it helps me.

As for the new Public audit reports, when purchasing Roger, the site prompted me to purchase the old materials if taking the test in Q4 2017, before the changes in Q1 2018. We should be good studying the 2017 materials for December.

Vinti, are you going to supplement Becker with Ninja or something else, MCQ test bank, etc.? Do you do the MCQs twice if you have the time?

Good Luck

[Kev]

I continue to get 85 and above on all the progress test that I take but when I took the mock exams I received a 70 and a 71, respectively. Not sure how I should approach studying at this point since I take my exam on 12/1. Any suggestions?

[Vinti]

@Sir plus
I dont think I will get time for doing MCQs twice. I am using Becker only.

[cpa2018]

Hi guys, I'm studying for audit and taking my exam in December. I'm currently using Wiley and was wondering if anyone has used the Focus Notes? If so, would you recommend those vs the Ninja Notes? I want a supplement for when I start reviewing. I somewhat like how detailed Wiley is but it makes it a real pain during my review process because there's just way too much information in the review book. Please let me know if any of you are using either of the two for AUD.

Good luck everyone!

[Defo]

can someone help explain this one. wiley says a. is incorrect but then in the explanation says it should be A. it marks D. as the correct answer

A lawyer's response to an auditor's inquiry concerning litigation, claims, and assessments may be limited to matters that are considered individually or collectively material to the client's financial statements. Which parties should reach an understanding on the limits of materiality for this purpose?

A. The auditor and the client's management.
B. The client's audit committee and the lawyer.
C. The client's management and the lawyer.
D. The lawyer and the auditor.

[Bourne]

Even googling the question there are conflicting answers. I'm curious about this as well.

[Sir Plus]

Defo,

I think the correct answer is answer A.

Lawyers aren't supposed to determine materiality, that's an accounting function. They wouldn't have the financial perspective to determine if the said legal issue affects the financial statements materially. However, the auditor takes this role on and somewhere along the way this is discussed with mgmt, maybe in the mgmt rep letter?

[Anonymous]

Hello everyone,

Is studying sampling as much as the other topics worth it? For some reason, I just don't understand it. Is it really that heavily tested? I can see other areas being tested more (audit reports, audit risk, etc.).

My question is: Am I wasting my time studying sampling over and over again, while I could focus on other areas? Sampling is by far my weakest area. My exam is 11/25

[Ben]

Defo,

I saw this question too (I also use wiley). In my version, A was the correct answer listed and as explained. From my understanding, the auditor is the one to set materiality. If communicating to the entity's lawyers, communication should be in a way to receive information needed for sufficient appropriate evidence, whatever that may be. Since, as stated earlier, lawyers aren't in a position to assess what may or may not be material to F/S.

[aishwaryaganesh186]

Hi,

What chances are there for a flowchart TBS to come? Any insights welcomed..!

[D.O.]

You should be good to go. You have 18 months from the time at which you pass any section of the exam before credit expires. The length of time required for grading/regrading, etc. has no effect. You are only responsible for fulfilling your end of the bargain and the exam you passed was taken within said period.

[dab88]

@Defo the answer is D Lawyer and Auditor

[D.O.]

Hey Defo, Bourne and everyone else this is just my two cents:

D. It is correct that the auditor has the sole responsibility of setting the materialty threshold for its client. However, in the case of most legal claims, the auditor is not permitted to represent a client in legal proceedings without elevating advocacy risk to a level which would violate independence. Moreover, both parties owe a fidicuiary duty to the client.

There is an exception to the rule when it comes to an auditor being able to represent a client in certain small claims proceedings. As such, it would be necessary for the lawyer to discuss materiality thresholds with the auditor so as to define instances in legal proceedings where a formal subpeona would be required in order to obtain audtor testimony.

[Sherry]

Hi guys,

I'm still confused between cooling off periods difference between AICPA and PCAOB. Is it one year for AICPA and 2 years for PCAOB. and secondly for which engagements its required that the auditor had already audited or at least reviewed the financial statements.

THanks

[Defo]

Thank you to everyone who weighed in on lawyer question. Especially the last few with choice D who made me try to dig a bit further. I have included a link the the literature on lawyer inquiry. I quoted the section that i believe confirms that D. is correct. Let me know if anyone thinks I still may not have this correct.

PCAOBUS.org

AS2505.12: A lawyer may appropriately limit his response to matters to which he has given substantive attention in the form of legal consultation or representation. Also, a lawyer's response may be limited to matters that are considered individually or collectively material to the financial statements, provided the lawyer and auditor have reached an understanding on the limits of materiality for this purpose. Such limitations are not limitations on the scope of the audit.

[Author]

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