AUD Study Group Q1 2015 - Page 41

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  • January 15, 2015 at 2:49 pm #650389
    Anonymous
    Inactive

    Fuzzy subject, anyone have any input?

    In my notes, from Becker, I wrote “A Modified Opinion cannot include an Unmodified Opinion on single Financial Statements or elements; this is contradictory and a piecemeal opinion (not allowed).”

    In the Ninja notes, page 61, it states “What if: Auditor wants to express opinion on A/R even

    though they Disclaimed an Opinion on the Financial Statements taken as a whole?

    o OK if report on A/R is presented separately”

    In relation to the 2 referenced items above, does this mean a piecemeal opinion is okay? Or is it the fact that the second opinion must be presented separately that does not make this contradictory?

    This seems like an easy topic but I'd like to hear what you guys think.

    January 15, 2015 at 3:07 pm #650390
    jeff
    Keymaster

    This may help:

    https://www.another71.com/cpa-exam-forum/topic/piecemeal-opinion-question-audit

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

    January 15, 2015 at 3:23 pm #650391
    Anonymous
    Inactive

    NoraU,

    Not sure, it was really hard, I wrote in aud exam experience thread

    I was actually looking up some questions from my test in the book even though I hate doing that, and realized that at least few I wasn't sure about I got wrong, but some I got right. Couple I couldn't even find the answer to in my book and am still not sure. The general topics were covered, but these particular matters weren't.

    But I don't know what I would have changed about my preparation strategy, probably nothing anyway, I did all I could

    January 15, 2015 at 3:34 pm #650392
    NoraU
    Member

    Anna, Lets hope for the best. I had similar feelings after FAR but I passed.

    Желаю удачи!

    BEC 05/12/14 77
    REG 08/25/14 82
    FAR 11/25/14 80
    AUD 02/25/15 72, 05/15/15 98! DONE!!!!!!!!!!!!!!!!!!!!!!

    January 15, 2015 at 3:36 pm #650393
    Anonymous
    Inactive

    Спасибо! Good luck to you too!

    January 15, 2015 at 8:41 pm #650394
    Martin
    Participant

    A CPA in public practice should maintain objectivity and be free of conflicts of interest when performing?

    A)Audits, but not any other professional services.

    B)All attestation services, but not other professional services.

    C)All attestation and tax services, but not other professional services.

    D)All professional services.

    What do u guys think?

    Through God all things can happen!

    “You never fail until you stop trying.”
    ― Albert Einstein
    When I was young, I used to admire intelligent people;as I grow older, I admire kind people.
    “Just keep swimming, just keep swimming.”

    FAR= 72-84
    Audit= 73-82
    BEC= 74-75
    Reg=77

    January 15, 2015 at 8:47 pm #650395
    SullivanNJD
    Member

    I would say all professional services. Integrity and Objectivity is the one rule that must be followed regardless of a service provided by a CPA

    FAR- 87
    REG- 81
    AUD- 88
    BEC-

    Who's Better Than Us? nobody

    January 15, 2015 at 9:14 pm #650396
    Anonymous
    Inactive

    Gonna go with D, as well.

    January 15, 2015 at 10:27 pm #650397
    WANNABE_CPA
    Member

    i think D too, whats the answer?

    FAR : 68, 74, 83 Thank you God 🙂
    BEC : 78 (8/27) 🙂
    REG : 72 ,80 (2/25) 🙂
    AUD : 69,67, 07/23

    January 15, 2015 at 10:35 pm #650398
    Dantrick
    Participant

    Before accepting an engagement to audit a new client, a CPA is required to obtain:

    A.an assessment of fraud risk factors likely to cause material misstatements.

    B.an understanding of the prospective client's industry and business.

    C.the prospective client's signature to a written engagement letter.

    D.the prospective client's consent to make inquiries of the predecessor, if any.

    These are the questions that annoy me in AUD. It is B or D is what I am thinking. The answer is D, but how is it more right then B.

    Oh now that I typed it up, I am wondering if D is more correct because with B you can accept the engagement and then get the understanding?

    January 15, 2015 at 10:45 pm #650399
    SullivanNJD
    Member

    Yep. You can accept the engagement and then gain an adequate understanding of the clients industry and business before you start doing the work.

    FAR- 87
    REG- 81
    AUD- 88
    BEC-

    Who's Better Than Us? nobody

    January 15, 2015 at 11:16 pm #650400
    WANNABE_CPA
    Member

    I agree with D with an understanding that the it is a lack of scope if the client does not consent to the inquiries to predecessor and engagement should not be accepted. Whereas, it is not a requirement to have understanding of clients business and industry to accept the engagament but it is beneficial to have knowledge and it can be gained later after accepting.

    FAR : 68, 74, 83 Thank you God 🙂
    BEC : 78 (8/27) 🙂
    REG : 72 ,80 (2/25) 🙂
    AUD : 69,67, 07/23

    January 16, 2015 at 4:59 am #650401
    WANNABE_CPA
    Member

    The concept of materiality would be least important to an auditor when considering the:

    A. Decision whether to use positive or negative confirmations of accounts receivable.

    B. Discovery of weaknesses in a client's internal control.

    C. Effects of a direct financial interest in the client on the CPA's independence.

    D. Adequacy of disclosure of a client's illegal act.

    Why is the answer C?

    Explanation says, Any direct financial interest in a client impairs independence, even if it is immaterial.

    Doesn't this statement contradict the question?

    FAR : 68, 74, 83 Thank you God 🙂
    BEC : 78 (8/27) 🙂
    REG : 72 ,80 (2/25) 🙂
    AUD : 69,67, 07/23

    January 16, 2015 at 5:30 am #650402
    SullivanNJD
    Member

    So, for independence of a CPA. If the financial interest is DIRECT, whether material or immaterial, the CPA's independence is impaired. An INDIRECT financial interest (member owns shares of a mutual fund that invests in the client) would only impair the CPA's independence if the interest is material.

    Since the answer included the word “direct” then materiality would not matter because it impairs independence regardless.

    FAR- 87
    REG- 81
    AUD- 88
    BEC-

    Who's Better Than Us? nobody

    January 16, 2015 at 2:44 pm #650403
    Dantrick
    Participant

    The auditor would normally concentrate on which of the following key factors and assumptions in evaluating the reasonableness of an estimate?

    A.

    Lack of relative significance of the accounting estimate

    B.

    That the estimate has little susceptibility to misstatement and biasness

    C.

    Consideration of the historical experience of the entity in making past estimates as well as the auditor's experience in the industry

    D.

    That the entity has established an audit committee to oversee the audit function

    I am trying to figure out why B is not a good answer. Explanation to the answer:

    In evaluating the reasonableness of an estimate, the auditor normally concentrates on key factors and assumptions that are:

    significant to the accounting estimate,

    sensitive to variations,

    deviations from historical patterns, and

    subject and susceptible to misstatement and bias.

    The auditor should consider the historical experience of the entity in making past estimates, as well as the auditor's experience in the industry.

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