[jeff]

Post by Another71.

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[Anonymous]

I feel like there are some contradictions here and there but can't really put my finger on it. It really doesn't help with understanding the pattern The subject is incredibly boring and there are all these nuances that are hard for ESL. I just f..g hate it

No, I was studying all this time, it's just took very long. I went back to work and my son requires more attention than before, those terrible twos.

[acctaks]

@anjanja yeah you will! Look at that killer FAR score! Sorry to confuse you. Okay, think back to the auditor's planning. The auditor doesn't perform any substantive procedures right? The auditor does do things like analytical procedures but they aren't substantive analytical procedures because it's not for the purpose of supporting an assertion. So, this is like the same thing. The auditor is at step one in this question. The auditor can make inquiries for example. It's not a substantive test though because it's not step 2 which is gathering evidence.

F-Pass
A-Pass
R-Pass
B-Pass

I'm a CPA!

[Anonymous]

FAR was so much more pleasant and even fun than this!

How can you tell if the auditor in this question is still at the planning stage?

[acctaks]

I agree and that's why I'm trying to help people out! It was terrible studying for this. I drank a lot of beer. I can tell because the lack of the word substantive and the inclusion of the key word evaluating. So, it's right there but even I added substantive because I'm so used to seeing it. It's not what the question is asking. Tricky questions. Let's say the minutes aren't available. The auditor then has to plan a different substantive procedure in order to support the assertion. Make sense?

F-Pass
A-Pass
R-Pass
B-Pass

I'm a CPA!

[Anonymous]

so is it determining vs evaluating? I thought those were synonyms.

I have this problem all the time, for instance “persuasive rather than conclusive” what? according to google translate it's the same thing

[Anonymous]

I keep getting this one wrong. How come “the higher the risk of material misstatement, the higher the inherent risk” is incorrect?

isn't RMM = CR x IR? How is it not directly related to DR?

The risk of material misstatement changes the auditor's audit plan in order to attain the same amount of audit risk in the following ways except:

A. the risk of material misstatement affects the amount of detection risk that the auditor can accept.

B. the higher the risk of material misstatement, the lower the detection risk must be.

C. the higher the risk of material misstatement, the higher the inherent risk.

D. the higher the risk of material misstatement, the more substantive procedures the auditor must perform.

Inherent risk is not directly related to control or detection risk and is uncontrolled by the auditor

[jstay]

I would guess between a or c. final guess would probably be A. only cause I know c is incorrect. answer is….?

[pengzars]

@acctake, thanks again

As I can see, A,B,D are definitely right. If RMM is high, it may be caused by CR, not IR.

A silly question, who is the primary source for corroboration of contingencies information, client or client lawyer?

BEC--83
REG--83
FIN--77
AUD--68-74-Q1/2015
MAY THE FORCE BE WITH US!!!

[jstay]

pengzars, I would say clients lawyers since its external, which is better then internally generated info. not entirely sure tho

[acctaks]

@anjanja LOL!

It's evaluating to determine.

B. inquiry of management. (I spoke with management and asked them to identify their accounting estimates)

C. information from available minutes. (I read the minutes and the policies do match what management described)

D. changes made to the entity's business, including operating strategy, and the industry in which the entity operates.

(Sales are declining rapidly for this industry. This creates more risk for the accounting estimates)

How are you the auditor going to identify ALL accounting estimates reported by management?

You're going to do B,C and consider D!

This is part of the auditor's risk assessment. Substantive tests are at the assertion level

---

> testing management's assertions.

F-Pass
A-Pass
R-Pass
B-Pass

I'm a CPA!

[Anonymous]

btw, who the hell has minutes anymore?

[Anonymous]

OK, it was my understanding in this question I should have been looking for the one thing that's not like the others, right? It's just that in this question the first 3 answers are procedures, and the last one is the risk factor, so I chose it. Who could blame me!!

[Anonymous]

IR =3

CR = 2

RMM = 2 x 3

RMM = 6

How is IR not directly related to DR if DR is related to RMM?

It's like the whole different world where common sense just doesn't work

[jstay]

anjanja, what was the answer to that question about RMM?

[Anonymous]

oh sorry, it was C

[Author]

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