[jeff]

Post by Another71.

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[jstay]

im really hoping having passed FAR & BEC can help me in AUD

[acctaks]

@anjanja I think you're a little confused. That wouldn't be a subsequent event at all. It would have to happen between the BS date and the date of the auditor's report. Or if it's discovered after it would have to be something material that belonged in the prior year only. Subsequent events are only concerned about items that belong in the prior year. Signing a new lease for the new year happens all of the time. If they signed it and a portion belongs in the prior year then that's different. The assertion in question is simply presentation and disclosure. The liability is disclosed and presented in the fs correctly.

Food for thought: If I didn't disclose my lease in the notes to the FS would that change the opinion in the auditor's report?

If so what would that opinion be changed to?

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

I'm a CPA!

[GoVPI]

As far as journal entries since haven't taken FAR yet or intermediate in a year I'd say there is some dust but I know the basics. Im going to brush up on them. Thanks.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Anonymous]

Why is completeness wrong? It just looks like whatever you do presentation will be affected. It's more general assertion than completeness. It's not really fair, is it

Determining that proper amounts of depreciation are expensed provides assurance about management's assertions of valuation and allocation and:

Correct A. presentation and disclosure.

B. completeness.

C. rights and obligations.

D. existence.

The key to this type of question is to ask, “What does the evidence obtained by this procedure prove?” and “What question does this procedure help answer?”

Determining that proper amounts of depreciation are expensed provides assurance about management's assertions of both valuation and presentation. Accumulated depreciation and the related expense reflect the valuation of fixed assets as presented in the balance sheet and the expense reported in the income statement, respectively.

The completeness assertion is a management assertion that all transactions and events that should be presented in the financial statements are included

[Anonymous]

If i remember correctly, if management has an intent and ability to refinance, the debt should be reclassified on the bs. Isn't it what the question is about?

[acctaks]

@CPAin14 it wouldn't be anything crazy but remember that cutoff is big deal. For example, do sales/inventor belong in this year or next year? If not then what adjustments would have to be made?

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I'm a CPA!

[acctaks]

@anjanja completeness is for account balances. For example, all of our liabilities have been recorded for the year. That's why you trace. Liabilities are likely to be understated so you want to make sure they are all there by starting with source documents and working back to the books.

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

I'm a CPA!

[GoVPI]

@ACC If the customer John sent a purchase order for goods in November Year 1 for $45,000 but XXX company was out of stock and didn't ship till Jan 15th Year 2, an adjusting entry must be made by company XXX since the goods were delivered/ shipped in year 2.

I did a TBS on that last night and got them all correct.

BEC 8/14/14 - Passed
Graduated from college 12/13/14
AUD 8/31/15 - 74. Retake - Passed
REG
FAR

[Anonymous]

i don't know, per Roger's book completeness is relevant to transactions and events, balances, and presentation and disclosures

[acctaks]

@CPAin14 yeah! As long as you have that kind of stuff down then you're golden. I'm sure you still remember FOB shipping point/destination and who the inventory belongs to. Or things like consignment and whether or not items belong in ending inventory.

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

I'm a CPA!

[acctaks]

@anjanja yes but in the context of your question completeness would be the assertion of the ending account balances not presentation. I guess it could be that all depreciation expenses have been recorded …..

The key words are “proper amount expensed”

so that's the allocation (depreciation was calculated correctly and the proper amount expensed) and presentation/disclosure.

If the question said the ending balance includes all expenses then it would be completeness.

They could even change it to all of the depreciation expenses are included and are classified in the proper accounts. That would be completeness & presentation/disclosure.

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

I'm a CPA!

[Mikdeez25]

I'm in, let's do this… No luck the first 2 rounds of AUD, 3rd time will be a charm, but I'm not relying on luck this time! Jan 3rd can't get here fast enough!

AUD - 72 - Retake 05/2015
BEC - 79
FAR - 77
REG - 77 - Lost Credit - Retake 2/07/15

[salring]

Okay can someone help me understand the assertions, I keep mixing them up.

1. Valuation & Allocation – Involves amounts?

2. Completeness – Ending balances?

3. Presentation and disclosure – ??

4. Rights and Obligation – Who owns what?

5. Existence – The transaction has actually been booked?

Any takers on explaining these concepts?

[jstay]

@salring

This me taking a stab at it

Valuation & Allocation- is it valued correctly? lower of cost or market? is it allocated properly to the correct account.

Completeness- Is everything included in what should be? Are all F/S presented

Presentation & disclosure- Fairly presented and properly disclosed- disclosure seems to be a big one

Rights & obligations- do we have rights to use assets? are we obligated to pay debt/liabilities?

Existence- do the assets exist? take a tour of facilities and see

[salring]

@jstay, thanks, your explanations are on point and make sense. I have read these 7 times and still get confused when I see them in a question.

[Author]

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