[jeff]

Post by Another71.

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[howmany74s]

@anjanja, please share what Roger will say about correct answer being D.

The ratio method is used when you're expecting to see large misstatements, regardless of the sample size. You can disregard my first response.

[Anonymous]

ihateAUD,

that should have been my name!

[Anonymous]

howmany74s

here is the conversation with homework people, I chose not to persist further. I suppose the question doesn't necessary imply that both expenses and income are overstated. In this case B works.

Moderator's answer to some other student:

d. We received notice but we didn't record the change. Therefore, we'd be recorded property tax rates as the same rate as prior year. This wouldn't be flagged in a flux analysis because the prior year is similar to the current year.

I'm not a huge fan of any of these answers, but the BEST answer here appears to be B.

If you can provide me with a reference to where you found this question in Roger's texts, I'll be sure to forward for review and correction for future updates.

I am asking:

Hello,

I know anything could happen, but it's little hard to believe that the property tax increase would cause 10% increase in company's overall expenses. I also don't see how could recording unrealized gain to I/S instead of OCI increase company's expenses. Could you please clarify?

Thanks!

Answer given to me:

Hello anjanja, and thanks for the reference.

Flux analysis looks at the percentage CHANGE in each line of the income statement, so a 10% change or difference in property tax expense wouldn't necessarily impact TOTAL expenses by that amount, but would indicate that this difference needs to be investigated.

Also, remember that the current US GAAP income statement includes both operating (current) net income and other comprehensive income–the total of the two being “comprehensive income.”

I hope this is helpful.

Roger CPA Review Team

[rutledges06]

Joining in! Already started studying after FAR on 11/20. Taking the exam on Jan 8th. Looking forward to studying with you all!

FAR - 76
AUD - 93 (73, 74 prior) - NINJA
REG - 86 (65, 70 prior) - NINJA
BEC - 75 (Popped the Bubble!)
Ethics - Done!

I have erased my 2010 attempts - Passed FAR with 76 and failed the others mutliples times.

[octobergirlie]

I have never taken an AUDIT class so this will be a first for me. I am using Becker and Ninja Audio. Feel free to let me kow if I should consider other resources since this is a brand new topic for me. Thanks and I hope you all study and do well!

FAR - 63, 66, 59, 76
BEC - 76
REG - 77
AUD - 63, 66, 82

DONE 🙂

[Anonymous]

I don't get it, what does the explanation have to do with the question asked.

The audit work performed by each assistant should be reviewed to determine whether it was adequately performed and to evaluate whether the:

A. auditor's system of quality control has been maintained at a high level.

B. results are consistent with the conclusions to be presented in the auditor's report.

C.audit procedures performed are approved in the professional standards.

D. audit has been performed by persons having adequate technical training and proficiency as auditors.

According to AU-C 230.02, the purpose of audit documentation is to provide:

B – evidence of the auditor's basis for a conclusion about the achievement of the overall objectives of the auditor.

evidence that the audit was planned and performed in accordance with generally accepted auditing standards (GAAS) and applicable legal and regulatory requirements.

Evidence of the auditor's basis for a conclusion about the achievement of the overall objectives would include the support for the auditor's report.

[howmany74s]

Hey anjanja,

So here are the steps of an audit working paper and these steps will answer all these working paper/procedure related questions:

1. Identify line item (balance sheet/income statement) and assess risk

2. Classify assertions that apply to the risks

3. Plan your substantive procedures (in your risk assessment working paper, you need to attach your procedures with each assessed risk) and perform them

4. Based on your procedure, conclude whether the population is XXX assertion (accurate/complete/presented and disclosed appropriately.. you name it)

Reviewer of the working paper will review your work according to these steps, and if your conclusion at step #4 does not agree to what the audit report will say, then you/your team will be in deep trouble in a case of inspection.

Hope this kind of break down your question in a more logical way.

[IhateAUD]

Help! I'm in CA and just found out I failed my AUD for the second time.

If I want to take it in early January( cause I don't want to lose my REG). Is that possible I can accelerate the CA review process and get approved asap???

[salring]

Can someone explain to me the 2 types of fraud and give examples? I keep getting confused about the 2 and need help with understanding.

Thanks.

[howmany74s]

@salring, are you referring to financial statement/reporting level fraud vs. asset related fraud?

If yes, reporting level involves management as they oversee the reporting process and probably post journal entries or adjust them, as they're the assigned final reviewers. Also they have the initiative to do so given they'll be responsible to explain low revenue/high expense issues once BoD or shareholders see the financials.

Asset related fraud is usually related to employees, it can be anything from pushing personal invoices through the firm to stealing actual assets of the firm.

[salring]

@howmany74s you are awesome, thank you!! This now makes soo much sense.

[rosssumner15]

I'm hoping someone can help me out. I am going through the Becker book and I am in the first section where it is talking about determining whether to make reference to the component auditor in the auditor's report. Something seems backwards to me.

If the component's financial statements are prepared using a different financial reporting framework from the group financial statements, reference to the component auditor should not be made in the auditor's report on the group financial statements unless:

1) the measurement, recognition, presentation, and disclosure criteria used by the component under the component's financial reporting framework are similar to the criteria under the reporting framework used by the group.

To me it seems like it would be the other way around. Why would the component auditor not be referenced if the financial reporting framework is not similar to the group??

FAR - 67-85
BEC - 75
REG - 78

[Anonymous]

Can someone clear this up for me with Becker?

Pages A2-5 & A2-7.

They are stating that Regulatory Basis Financial Statements Intended for General Use should not include an emphasis-of-matter or other matter paragraph. And then they go on to summarize all of the frameworks on page 7 and mark it as Yes it is needed… Im confused

[teamryan15]

To the people who are retaking the exam and studied the 2014 material. How are you addressing the 2015 material? Is there a summary of where we can find the changes?

[howmany74s]

teamryan, I've been asking the same question over and over, but didn't get a satisfactory answer. The brief explanations I've seen here and there don't really justify the 30 minutes extension of the test.

[Author]

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