[jeff]

Post by Another71.

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[LKD CPA]

Trish, I agree with you and you gave solid advice! It really is the luck of the draw. I certainly do agree with your opinion on the SIMS. There is is no solid way to prep! I had two that seemed obscure and were on topics that were a strong emphasis in my study material. You said it best: “be prepared for anything!!!”

FAR: 74, 83
REG: 76
BEC: 77
AUD: 89

[Kohn]

Can anyone explain in very plain terms the exact difference between observation and inspection? I had though inspection referred more to looking at documents. But when I had to choose a procedure name for opening boxes of inventory, I was torn between inspection and observation. Audit evidence and procedure is killling me.

BEC 67, 76

AUD 58, Retake 4/19/2015

[trish_1234]

inspect documents and or records

observe a procedure or process being performed … for instance if a control is being applied

post the full question that concerns you, sometimes its one key word that makes all the difference in finding the right answer. Auditing is so weird

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[trish_1234]

tricky, thanks for sharing. took a while came up with a crazy explanation and example as to how to rationalize these types of questions…

I see how it could be observe bc one could say “I'm gonna observe inventory count and make test counts.” The way I would make logic of this question/correct answer and approach other related questions is by thinking….

” I am going to as the staff to leave these boxes opened so that I can inspect it and affirm that it is not empty” sounds better to than thinking “I am going to ask the staff to leave these boxes opened so that I can observe it is not empty” I guess if the question was phrased to imply that you are going to observe staff opening the boxes it would be observe… Makes logic??

Observe is watching an action….like watching the staff opening the boxes…but the auditor is not concerned with this, the auditor is concerned with making sure the boxes are not empty (not empty is not a process to observe) its a state that needs to be inspected..

hope that helps, I am so crazy in rationalizing auditing lol…. If you have any crazy easy method to quickly understand how circumstances affects changes in ratios please share thanks

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[Hunter303449]

Can someone explain this question to me (Becker A5, Sampling):

“In attribute sampling, a 25% change in which of the following factors will have the smallest effect on the size of the sample?

a) Number of items in the population.

b) Planned assessed level of control risk.

c) Degree of assurance required.

d) Tolerable rate of deviation.”

Correct answer: A. I just can't wrap my head around the fact if your population increases, your sample size doesn't change.

BEC - ? (5/2015)
AUD - 83 (4/2015)
REG - 86 (7/2014)
FAR - 62, 74, 78 (1/2015)

[trish_1234]

From what I gather, sample size is relatively insensitive to size change in large population (over 2000 that uses the standard table to calculate sample size)

NOTE: Look at the table “sample size for tests of controls-5% risk of overreliance” notice that vertically we have “expected population deviation rate” while horizontally we have “tolerable deviation rate” There is nothing on that table that asks for population size

population needs to only be greater than 2000 to use the table

Plus

we need to be satisfied with 5% risk of overreliance

and need to know

expected population deviation rate

and tolerable deviation rate

note also from that table as we accept more deviations from the population (errors) the less items we need to sample.

hope that helps

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[trish_1234]

@ Hunter check out this question that I just got

A CPA’s test of accuracy of inventory counts involves two storehouses. Storehouse A contains 10,000 inventory items and Storehouse B contains 5,000 items. The CPA plans to use sampling without replacement to test for an estimated 5% deviation rate. If the CPA’s sampling plan calls for a specified reliability of 95% and a tolerable rate of 7.5% for both storehouses, the ratio of the size of the CPA’s sample from Storehouse A to the size of the sample from Storehouse B should be

A. 2:1.

B. More than .5:1 but less than 1:1.

C More than 1:1 but less than 2:1.

D 1:1

correct answer is C

explanation

The relationship between population size and sample size is direct. As the population size increases, so does the necessary sample size, although not proportionally. Generally, the population size has very little effect on the sample size when the population is large. According to the AICPA Audit Guide Audit Sampling, a population greater than 2,000 sampling units is large. If the population has between 200 and 2,000 sampling units, the effect on the sample size is small. For smaller populations, sample size is reduced by the effect of population size. Thus, more items would have to be sampled from Storehouse A than from Storehouse B, but not twice as many.

Tricky this topic

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[Author]

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