[jeff]

Post by Another71.

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

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Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[pengzars]

hey guys,

if the auditor has audited the customer for a long time, like 5 years, the audit risk will increase or decrease?

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

[jackaroe]

@Troblin – 5, 8, 13, 20-25, 28, 55, 58 – the 60s have some good stuff. These are the numbers of areas that I am weak in or forgot. YMMV. Everything is important – to include the rationalization of why an audit procedure is called an ‘observation' vs. an ‘inspection'. Little widgets like knowing that the attorney's letter needs to be in two weeks before the report date are found in simulations.

While there are audit simulation questions in the exam that can be found in the Authoritative Literature word for word, most of the simulations that I have encountered definitely were not of those type. You will immediately know on the exam whether the cpa exam gods are gonna be good to you or you are going to be wishing that you had studied FAR more. I've had that unpleasant experience too many times. It's worth it to do all the simulations you can because sometimes there's a gimme in there even if you have no idea about the topic by just looking at the answers. Each point on your exam is precious and can cost you plenty of time studying for this topic again. Better to study more now.

[hkumar117]

Can someone help me with the difference of ICFR between AICPA and PCAOB? I know that if you're auditing a public company, you must give an opinion on ICFR but if you're auditing an non-issuer, are you required to look at internal controls at all? If so, is it just to determine the amount of reliance and extent of substantive testing?

BEC - 79
AUD - 7/22/15
REG - 8/31/15
FAR - Sometime in November

[mtwst113]

Here is a link to another thread that should help clarify: https://www.another71.com/cpa-exam-forum/topic/opinion-on-entitys-internal-control-over-financial-reporting

BEC | √
AUD| √
FAR| Spring 2015

[mtwst113]

I was reviewing A1 again in Becker and came across a strange section on page A1-15. It says at the top of the page that PCAOB Auditing standards No. 1 requires the auditor's report to include a reference to the standards of the PCAOB. Then as an example right below it says (quotations included, in bold) ” We conducted our audits in accordance with the standards of the public company accounting oversight board”.

I missed a multiple choice a question regarding this, because the correct answer choice said PCAOB standards are required to be referenced in the auditors report of an issuer. From everything i've studied so far, I have not seen a report directly mention PCAOB standards. My understanding is that auditing reports (for issuers AND non-issuers) mention the audit was conducted in accordance with GAAS in the scope paragraph, and GAAP in the opinion paragraph. I also understand that the PCAOB standards have adopted some of ASB's standards but also have released their own auditing standards.

Can anyone explain this?

BEC | √
AUD| √
FAR| Spring 2015

[Anonymous]

I thought if the auditor is reporting on issuer, pcaob standards are mentioned

here https://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_1_Appendix.aspx

[mtwst113]

Hmm, thanks anjanja, I guess it is a requirement but Becker didn't have an example report like that in the textbook.

BEC | √
AUD| √
FAR| Spring 2015

[Anonymous]

When an auditor qualifies an opinion because of inadequate disclosure, the auditor should describe the nature of the omission in a basis for qualification paragraph and modify the

I. Auditor's Introductory paragraph

II. Responsibility paragraph

III. Opinion paragraph

a I only.

b I and II only.

c II and III only.

correct d III only.

?

[pengzars]

@anjanja, I think the auditor responsibility paragraph should modify

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

[Anonymous]

I think so too, but not per Roger and they are consistent with that. There are few mcq's, charts in the text, illustrative report. Not sure what to think

[pengzars]

hey guys,

Rate of Return

on Assets = (Net income + Interest expense) ÷ Average total assets

or

return on assets =net income / average total assets?

I am totally confused right now…..a NINJA sim says the first is right …

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

[ruggercpa2b]

I went through my study text for audit reports and it says the following below for an Adverse opinion and a Qualified opinion due to a misstatement.

Effect of an Adverse Opinion on the Auditor's Report

A. No effect on the introductory paragraph or management's responsibility section.

B. Auditor's responsibility section—modify the last sentence to state, “We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our adverse audit opinion.”

C. Add a “Basis for Adverse Opinion” paragraph (with such a label) before the opinion paragraph. The auditor should include a description and quantification of the financial effects of the misstatement (when practicable); likewise, the auditor should include the omitted information (when practicable).

D. Express the adverse opinion using appropriate language such as: “In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion paragraph, the financial statements referred to above do not present fairly . . .” and label the opinion paragraph “Adverse Opinion.”

Effect of a Qualification for a Misstatement on the Auditor's Report

A. No effect on the introductory paragraph or management's responsibility section

B. Auditor's responsibility section—modify the last sentence to state, “We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.”

C. Add a “Basis for Qualified Opinion” paragraph (with such a label) before the opinion paragraph. The auditor should include a description and quantification of the financial effects of the misstatement (when practicable); likewise, the auditor should include the omitted information (when practicable).

D. Qualify the opinion using appropriate language such as: “In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements referred to above present fairly . . .” and label the opinion paragraph “Qualified Opinion.”

AUD - 73, 72 retake 7/2/2016
BEC - 8/20/2016
REG - TBD
FAR - TBD

I am so ready for this nightmare to be over. Been at this way too long.

[Anonymous]

Thanks ruggercpa2b,

so C is the correct answer?

[jstay]

i was going to with C. i think i had a question in becker yesterday asking something similar and i chose the two paragraphs instead of the one and it ended up being right

[pengzars]

Management’s representations may not be limited to matters considered either individually or collectively material to the financial statements.

---

false

Management’s representations MAY be limited to matters considered individually or collectively material to the financial statements,

---

true

dose anyone can help explain the difference between MAY and MAY NOT???

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

[Author]

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