[jeff]

Post by Another71.

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[Anonymous]

@CTM – Yeah I know when I originally answered the question I picked C because I figured it was the “most correct” as OCBOA would include more than just contactual & regulatory basis… I will email Jeff and see if he will break it down.

In discussion about the change in accounting principles in a qualified vs. OM vs. EOM paragraph…

@CTM nailed it with acceptable = OM/EOM and an unacceptable change = qualified opinion.

My opinion with regards to the OM vs. EOM paragraph usage I think it really comes down to whether or not the client disclosed the lack of consistency in the financial statements. If an item is disclosed you would use the EOM paragraph and emphasize the matter. If the item was not disclosed in the financial statements by the client than the auditor would use the OM paragraph to address the issue. (Disclosure: this is from personal understanding – not the textbook.)

[jackaroe]

AU-C Section 800.07

The cash basis, tax basis, regulatory basis, and other basis of accounting are commonly referred to as other comprehensive bases of accounting.

[Anonymous]

From Jeff:

“Good question –

A) specifies 2 of the OCBOA

C) is more encompassing of the other types (Cash Basis, Tax Basis, etc) as well.

C is “more correct” than A 🙂

—

HiYa!

-Jeff”

“I just checked – it's question #1443 and it has C as the answer.

Financial statements are considered special-purpose financial statements when:

A.prepared in accordance with either a regulatory or contractual basis of accounting.

B.restricted as to use.

Correct C.prepared in accordance with either a contractual or an other comprehensive basis of accounting.

D.prepared on a pro forma basis designed to demonstrate the effects of hypothetical transactions.”

IDK if there is a similar question floating around out there or what but if anyone runs across it again try to post the question #.

[Anonymous]

Thank GOD!! I thought it should be C. It does look like the “most correct” answer. That said, I REALLY hope I don't come across too many of these types of problems where two answers are correct but one is more correct than another.

[Anonymous]

Agreed ^^

__________________________________________________________

When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditor should:

A. not refer to the change in the auditor's report.

B. refer to the note in the financial statements that discusses the change.

C. refer to the change in an emphasis-of-matter paragraph.

D. explicitly state whether the change conforms with GAAP.

This question seemed on topic with recent discussions.

[Martin]

Am I the only one that finds the Ninja MC questions harder than Becker and Wiley? My average with Wiley and Becker is around 85,but only 72 with ninja. Some are repeated questions from Wiley and Becker,but a lot of them are new and tricky. I feel ready when I work on Becker and Wiley, and like a moron when I work with ninja mc. I'm taking Becker finals this week to see how ready I might be for next week.

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

[Anonymous]

@ARCPA2B, is it A?

[Martin]

I think is A.

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

[rachel525]

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:

1. Intro paragraph

2. Auditor's responsibility paragraph

3. Opinion paragraph

1. NO

2.

3. YES

Should the auditor modify the auditor's paragraph?

[Martin]

No. You do this for division of responsibility and score limit.

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

[Anonymous]

A. was the correct answer above per the following explanation.

AU-C 708.A1 states, “Unless the auditor's report explicitly states otherwise, the auditor's report implies that the auditor is satisfied that the comparability of financial statements between periods has not been materially affected by a change in accounting principle or by adjustments to correct a material misstatement in previously issued financial statements. There may be no effect on comparability between or among periods because either (a) no change in an accounting principle has occurred, or (b) there has been a change in an accounting principle or in the method of application, but the effect of the change on the comparability of the financial statements is not material. When no material effect on comparability results from a change in accounting principle or an adjustment to previously issued financial statements, the auditor need not refer to consistency in the auditor's report.”

_________________________________________________________________________

@Martin – I agree, now that I have got to the “Adaptive Learning” phase of Ninja I feel the questions are definitely more difficult.

[Anonymous]

I need to make an excel chart of when to modify certain paragraphs of the auditors report… I was supposed to make one for the assertions and related procedures this weekend and never got around to it.

[rachel525]

Thanks! This is so confusing!

[rachel525]

Quick question, the term OMB Circular A-133 is no longer used right? The new term is Code of Federal Regulations?

[Anonymous]

@rachel – I have not heard that, and I know at work we received an updated OMB Circular A-133 at the beginning of the year.

The Code of Federal Regulations (CFR) is the codification of the general and permanent rules and regulations (sometimes called administrative law) published in the Federal Register by the executive departments and agencies of the federal government of the United States.

The OMB A-133 Compliance Supplement is a large and extensive United States federal government guide created by the Office of Management and Budget (OMB) and used in auditing federal assistance and federal grant programs, as well as their respective recipients. It is considered to be the most important tool of an auditor for a Single Audit.

It was created following amendments in 1996 to the Single Audit Act based on numerous studies performed by the Government Accountability Office, the President's Council on Integrity and Efficiency and the National State Auditors Association (NSAA). It serves to identify existing important compliance requirements that the Federal Government expects to be considered as part of a Single Audit. Without it, auditors would need to research many laws and regulations for each single program of a recipient to determine which compliance requirements are important to the Federal Government. For Single Audits, the Supplement replaces any agency audit guides and other audit requirement documents for individual Federal programs.

[Author]

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