AUD Study Group Q1 2015 - Page 43

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  • January 18, 2015 at 8:33 pm #650419
    SullivanNJD
    Member

    Just to clarify the above. I am pretty sure management prepares the inquiry letter and the auditor handles sending and receiving the letters. This goes for confirmations as well. The auditor wants to be in control of sending/receiving to ensure that it actually goes to the intended party and not modified in anyway along the process.

    FAR- 87
    REG- 81
    AUD- 88
    BEC-

    Who's Better Than Us? nobody

    January 18, 2015 at 9:23 pm #650420
    salring
    Participant

    I think D is correct too, I was conflicted because a similar question in Wiley states C as the correct answer.

    January 19, 2015 at 1:17 am #650421
    koolkat
    Member

    @pengzars: I am not sure if you received a response to your question regarding going concern, but I looked it up in the Wiley book and on page 348, there is a reference to AU-C 570 that indicates the following:

    “Auditors are required to consider whether there is substantial doubt as to whether an an entity will continue as a going concern for a reasonable period of time not to exceed one year from the date of the financial statements.” Additionally, there is a reference on page 76 of the Wiley book that compares ISA to PCAOB. Based on this information, I would say that the answer is 4. Hope this helps. 🙂

    2002-2003 (when it was 2 Day Test):
    AUD - 69, 80, 81
    LAW - 73, 73, 73
    TAX- 71, 72, 67*
    FAR- 66, 63, 57*
    (*on 3rd try, just tried to pass AUD & LAW while getting above 50 on these;didn't work)

    2012-Present:
    AUD - 73, 76 (expired 01/31/14), 70 (UGH)!, 86 (4/4/15 - praise God)!!
    BEC- 55, 69, 69, 78 (expired 10/31/14), 5/26/15...76!!!! AND I'M FINALLY DONE!!!
    FAR- 71, 71, 70, sat 11/24/14 - 75 PASSED!
    REG- 65, 67, 71, 66, sat 10/4/14; 75 PASSED!

    January 19, 2015 at 2:49 am #650422
    WANNABE_CPA
    Member

    @koolkat and pengzars, I think it should be 4 too. In support of 4, i just read this paragraph in becker which says:

    ” ISAs require the auditor to consider the same period that was used by management in making its assessment of the entity's ability to continue as a going concern. This period must be at least, but not limited to, twelve months from the balance sheet date.”

    I hope its a mistake in wileys, or i would need a better explanation. What do others think?

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

    January 19, 2015 at 4:15 am #650423
    Anonymous
    Inactive

    I understood it as…

    ISA going concern at least 12 months, no maximum.

    GAAS going concern up to 12 months at maximum.

    Referring to the financial statement date.

    January 19, 2015 at 4:28 am #650424
    WANNABE_CPA
    Member

    @arcpa, thank you, i think i will remember it this way too now.

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

    January 19, 2015 at 8:29 am #650425
    koolkat
    Member

    @ARCPA2B, I completely agree with that response and it is exactly how I have it memorized.

    2002-2003 (when it was 2 Day Test):
    AUD - 69, 80, 81
    LAW - 73, 73, 73
    TAX- 71, 72, 67*
    FAR- 66, 63, 57*
    (*on 3rd try, just tried to pass AUD & LAW while getting above 50 on these;didn't work)

    2012-Present:
    AUD - 73, 76 (expired 01/31/14), 70 (UGH)!, 86 (4/4/15 - praise God)!!
    BEC- 55, 69, 69, 78 (expired 10/31/14), 5/26/15...76!!!! AND I'M FINALLY DONE!!!
    FAR- 71, 71, 70, sat 11/24/14 - 75 PASSED!
    REG- 65, 67, 71, 66, sat 10/4/14; 75 PASSED!

    January 20, 2015 at 2:53 am #650426
    Anonymous
    Inactive

    Does someone remember which homework packet in becker deals with segregation of duties questions. I can NEVER seem to get those questions right. Ever!

    January 20, 2015 at 3:27 am #650427
    WANNABE_CPA
    Member

    @sunni,i think A4 Audit Procedures has segregation questions.

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

    January 20, 2015 at 5:31 am #650428
    SullivanNJD
    Member

    If you keep in your mind that authorization, record keeping and custody should all be segregated you can kind of talk yourself through a lot of the questions on those.

    FAR- 87
    REG- 81
    AUD- 88
    BEC-

    Who's Better Than Us? nobody

    January 20, 2015 at 7:17 am #650429
    Anonymous
    Inactive

    I get confused between authorization and record keeping all the time. I understand the definition but I dont conceptually see the difference more often than not.

    January 20, 2015 at 3:53 pm #650430
    jackaroe
    Participant

    @Sunni – Authorization is giving someone permission to do something. Record keeping is recording transactions in the books. The third part of this trilogy is ‘Custody'. For internal control to be effective – these three functions ought to be kept separate. There are compensating controls such as greater management oversight, that can be instituted when segregation of incompatible duties can't be accomplished (e.g., company is tiny).

    January 20, 2015 at 10:24 pm #650431
    Anonymous
    Inactive

    I'm a little confused by this question. Hopefully someone can clarify…

    A report on IC over compliance will include which of the following assertions?

    Answer: a disclaimer of opinion on IC over compliance

    The audit opinion states that the audit was conducted in order to express an opinion on compliance but not for the purpose of expressing an opinion on the effectiveness of IC over compliance.

    Another question I read stated an auditor detects noncompliance that have a material effect on the program he/she should issue a qualified/adverse opinion.

    January 20, 2015 at 11:59 pm #650432
    Anonymous
    Inactive

    @cpa8488 – I believe the question is referring to an attestation service, reporting on the internal control over compliance. When issuing your report on the internal control over compliance you are not issuing an “opinion.” In the “report” you would disclaim that you are issuing an opinion on the internal control because that is not the purpose of the service. I'm struggling to really understand your post though so this may not be accurate. Can you upload a screenshot of the question to imgur and post a link? Maybe someone else will be able to better understand.

    January 20, 2015 at 11:59 pm #650433
    Anonymous
    Inactive

    Double post so some basic refresher info…

    Negative confirmations are used in situations where detection risk is high.

    Positive confirmations should be sent to customers when expecting a high amount of errors.

    Positive blank confirmations should be used when you expect a high amount of errors and don't expect the customer to pay attention to the confirmation.

    Assets / revenues are “vouched” from the financial statements to the source documents, these types of accounts are generally overstated.

    Liabilities / expenses are “traced” from the source documents to the financial statements to test for completeness, these types of accounts are generally understated.

    If the exam mentions the client uses a tax-based reporting framework you would consider the opposite (swap A/R and L/E).

    Just running through some things in my mind.

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