[jeff]

Post by Another71.

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

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

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

[jackaroe]

@willpassby2014 – I encountered a similar example in my text book which had a similar problem – the problem is with the accounting system at the customer. In that example the correct answer was “Auditor should send a second request to the customer. This second request should include individual invoice numbers and amounts. It might also be helpful to send copies of the invoices themselves. Another option here is to examine shipping documents and subsequent cash receipts. At this point, no evidence on the proper balance has been collected.”

I can't imagine why with three days left I am avoiding practicing simulations. Thanks for the question.

[Anonymous]

Becker has the same simulation and the answer shown is the same as the Ninja answer so I would lean toward the Ninja answer being correct.

[jackaroe]

Anyone else notice that the Code of Professional Conduct is no longer available in the old format? Hopefully, there won't be too many questions regarding which section the topics are from.

[Anonymous]

Neither Becker nor Ninja say to send a second confirmation. Both say to “verify by examining shipping documents and subsequent cash receipts.” You are correct. A second confirmation with the same information would be pointless. Only a second confirmation with purchase order numbers would be beneficial in this example.

[Anonymous]

I found about the site recently. I found it very helpful. Am planning to take audit at the end month. Any advise on the exam will be helpful.

FAR – 82

REG – 78

BEC – 80

AUD – 2.28

[TCaniford5]

I'm taking AUD retake on Tuesday after a year break and a 73. I've been using the NINJA MCQ non-stop. I'm in the last few days of final review and have successfully gone through a TON of questions:

Total MQC Attempts 3642

Average Score: 78%

Average Trending Score: 98% (I think this is so high bc I went through all the incorrect ones until I got them all right so I don't know how accurate that is)

Simulations: attempting all 84 at least once

I feel pretty confident and I'm planning on using the next few days to go over some of my problem areas. (Assertions and Ratios) I know from experience and others we don't need to memorize Ratios, but I tend to confuse the relationships of them and get those types of questions wrong.

I hope everyone taking Audit in the next week is feeling good and we can kick this test in the butt! 🙂

AUD 73, RT 2/24/15 78!!!
BEC 50 (2009), 57 (2010), RT Q2 2015
REG 70 (2011)
FAR TBD

“It always seems impossible until it’s done.”
—Nelson Mandela

[Anonymous]

@TCaniford5 – “I know from experience and others we don't need to memorize Ratios, but I tend to confuse the relationships of them and get those types of questions wrong.”

Can you explain what exactly you mean by this? I've seen this mentioned a couple times and it confuses me somewhat. I think I've heard that if a ratio is needed the formula is provided on the exam? Also, what do you mean by confusing relationships?

This is going to be my first shot at AUD and while I understand the ratios “okay” I would really appreciate some more input on this subject.

Thank you.

[willpassby2014]

Why is A not correct. If we discussi with lenders we might restructure the debt and pay less interest and monthly payment. Postponing R&D is equally good anwer. If i get like these in exams i am screwed.

Cooper, CPA, believes there is substantial doubt about the ability of Zero Corp. to continue as a going concern for a reasonable period of time. In evaluating Zero's plans for dealing with the adverse effects of future conditions and events, Cooper most likely would consider, as a mitigating factor, Zero's plans to:

Incorrect A.

discuss with lenders the terms of all debt and loan agreements.

B.

strengthen internal controls over cash disbursements.

C.

purchase production facilities currently being leased from a related party.

D.

postpone expenditures for research and development projects

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

@willpassby2014

I think it is important to remember you must always look for the “most correct” answer to a question, especially if the questions states “…most likely would consider…”

Also, a “postponement of expenditures” is a direct mitigating factor of a going concern doubt. By just “discussing with lenders” and not “postponing due dates or lowering payments” the client is not really mitigating the doubt.

[ruggercpa2b]

I think A would actually help you in making the judgement on the company's ability to continue as a going concern. When you discuss with lenders and find out the terms and realize the company cannot meet the terms of debt agreements makes their ability to continue questionable. It's just a discussion and not really a solution. Answer D is a solution

Remember not to read a question and then add what they could do with that information. Your logic is correct but because the answer is not restructuring debt then As is not the correct answer given you have an answer that would mitigate the risk

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]

In testing the existence assertion for an asset, an auditor ordinarily works from the:

Incorrect A.

financial statements to the potentially unrecorded items.

B.

potentially unrecorded items to the financial statements.

C.

accounting records to the supporting evidence.

D.

supporting evidence to the accounting records.

__________________________________________________________________________________________________

Choice C is the correct answer.

Explanation:

In designing substantive tests related to the existence assertion, the auditor would select items from those contained in a financial statement amount and search for relevant audit evidence. Accounting records would contain financial statement amounts and such records could be then linked to supporting evidence.

___________________________________________________________________________________________________

Can anyone break this down for me? I get the basic idea of vouching existence. However, for an asset I would think that vouching from the F/S to the actual asset would be the process?

[willpassby2014]

Existence for asset means do all assets that are recorded in F/S actually exist. So you go from F/S to supporting documents.

when you go from supporting documents to F/S – you are checking if all assets that are there completely recorded? -talks about completeness assertion.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

So am I simply misunderstanding/misreading A?

“Incorrect A. financial statements to the potentially unrecorded items.”

[willpassby2014]

How can you trace from F/S to unrecorded item. This is not a valid statement at all. Thats what i think

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Anonymous]

Yeah that would make sense. I guess my brain just doesn't process that statement.

[Author]

Replies