[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for AUD.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

[martababyxd]

Anyone else anxiously waiting the 2016 updates so they can dig into the new material?

[FAR_WARS]

I don't think much has changed for AUD. Please let me know if I am wrong!

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Pete]

thanx Far_wars

[payaza2000]

One area I really struggle on is F/S Assertions, can someone in English (lol) what transaction classes, and scenarios that would apply to the six assertions. a BIG Thank You,

A) Completeness
B) Cutoff
C) Valuation, Allocation, and Accuracy
D) Existence & Occurrence
E) Rights & Obligations
F) Understandably and Classification.

FAR 5/6/2015- 84
REG 8/3/2015 - 87
AUD 10/25/2015- 69 1/20/2016 -75
BEC 2/26/2016- 80

Thank you God

[csvirk]

Which of the following statements is correct concerning statistical sampling in tests of controls?

Incorrect A.
As the population size increases, the sample size should increase proportionately.

B.
Deviations from specific internal control procedures at a given rate ordinarily result in misstatements at a lower rate.

C.
There is an inverse relationship between the expected population deviation rate and the sample size.

D.
In determining tolerable rate, an auditor considers detection risk and the sample size.

someone Please explain why B is correct answer. thanks.

FAR: 71, 77!
AUD: 69, 80
BEC: 72
REG: 84

[FAR_WARS]

If an Internal Control isn't working, a misstatement doesn't necessarily exist. It just creates the potential for a misstatement to exist. Therefore the relationship between the two would not be direct…

hopefully that helps some.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Pete]

An auditor’s decision either to apply analytical procedures as substantive procedures or to perform tests of transactions and account balances usually is determined by the
A. Auditor’s familiarity with industry trends.
B. Auditor’s determination about whether audit risk can be sufficiently reduced.
C. Availability of data aggregated at a high level.
D. Timing of tests performed after the balance sheet date

[FAR_WARS]

I found the same question, but the answer given is:

“Relative effectiveness and efficiency of the tests”

Explanation: Substantive tests, which are comprised of analytical procedures and tests of details (transactions and account balances), must be performed to substantiate the financial statement assertions. The decision about which procedures to use to achieve a particular audit objective is based on the auditor's judgment on the expected effectiveness and efficiency of the available procedures.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Pete]

so the answer is B ?

[Pete]

Question: 5 The AICPA’s Code of Professional Conduct includes a Form of Organization and Name Rule. It states that a member may practice public accounting only in a form or organization allowed by law or regulation that conforms with resolutions of the AICPA Council. Assume that a CPA firm is part of an alternative practice structure (APS) in which the firm is a subsidiary of another entity. Which attribute prevents a member of the AICPA from practicing public accounting in the APS?
A. Non-CPAs own a majority of the firm’s financial interests.
B. The parent leases employees to the firm.
C. The parent performs back-office functions for the firm.
D. Substantially all revenues of the firm are paid to another entity.

[KJ]

@ peter, I would say B

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[Pete]

Answer (A) is correct.
The overriding focus of the Council Resolution, the Code, the bylaws, and other AICPA requirements is that CPAs remain responsible, financially and otherwise, for the attest work performed to protect the public interest. Thus, CPAs must own a majority of the firm in terms of financial interests and voting rights. However, in the context of alternative practice structures (APSs), CPAs may own the majority of financial interests and voting rights in the attest firm, but substantially all revenues may be paid to another entity in return for services and the lease of employees, equipment, etc. Nevertheless, given the safeguards in the resolution, Code, etc., if the CPA-owners of the attest firm remain financially responsible under state law, they are deemed to be in compliance with the financial-interests requirements of the resolution.

[KJ]

@ Peter, A for question 5, B was for previous question, is it right?

FAR - August 2016
AUD - September 2016
REG - October 2016
BEC - November 2016

Remember: "Everything should be made as simple as possible, but not simpler." - Albert Einstein

[Pete]

it's said b wrong cuz :

Answer (B) is incorrect.
The CPA firm complies with the Code even if the parent leases employees to the firm.

[Pete]

@KANWAL78 yes

and here the answer

Answer (B) is correct.
For some assertions, analytical procedures alone may suffice to reduce audit risk to an acceptably low level. For example, the auditor’s risk assessment may be supported by audit evidence from tests of controls. Substantive analytical procedures generally are more applicable to large transaction volumes that are predictable over time (AU-C 330). The decision is based on the auditor’s professional judgment about the expected effectiveness and efficiency of the available procedures.

sorry about my mess 🙂

[Author]

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