[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

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

[FAR_WARS]

yes. Definitely a need to know topic!

GAAP Problem = qualified/adverse
GAAS Problem = qualified/disclaimer (scope limit)

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

[csvirk]

@FAR_WARS

Thank You this helps. When do you plan to sit for exam? If You don't mind asking.

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

[FAR_WARS]

Probably as soon as I can get a test date. My application is taking forever to process. When are you sitting?

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

[csvirk]

wow didn't know it can take forever. I am planning to sit in 2nd week of January, although i haven't made any appointment because it is relatively easier to get appointments.

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

[payaza2000]

Guys really really stupid question regarding language in auditing; substantive procedures and test of details are synonymous;; correct?

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

[FAR_WARS]

not quite. Substantive procedures are divided into 2 types. Tests of details and analytical procedures.

And then don't forget tests of controls which i believe are entirely separate?

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

[Pete]

yes agree with far-wars
Further audit procedures consist of a test of controls and substantive test, right?

[payaza2000]

From AU-C 330

8 The auditor should design and perform tests of controls to obtain suf-
ficient appropriate audit evidence about the operating effectiveness of relevant
controls if
a. the auditor's assessment of risks of material misstatement at the
relevant assertion level includes an expectation that the controls
are operating effectively (that is, the auditor intends to rely on
the operating effectiveness of controls in determining the nature,
timing, and extent of substantive procedures) or
b. substantive procedures alone cannot provide sufficient appropriate
audit evidence at the relevant assertion level. (Ref: par. .A21–
.A26)
.09 In designing and performing tests of controls, the auditor should obtain
more persuasive audit evidence the greater the reliance the auditor places on
the effectiveness of a control

Also

A46 Depending on the circumstances, the auditor may determine the following:
• Performing only substantive analytical procedures will be suffi-
cient to reduce audit risk to an acceptably low level, such as, for
example, when the auditor's assessment of risk is supported by
audit evidence from tests of controls.
• Only tests of details are appropriate.
• A combination of substantive analytical procedures and tests of
details are most responsive to the assessed risks.

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

[Anonymous]

The basic content of a report on management's assertion on the effectiveness of a nonissuer's internal control includes all of the following items except:

A.A paragraph restricting use of the report only to management and specified third parties.

B. A statement on the inherent limitations of internal control, referring to the possibility of errors and irregularities, and suggesting that the reader not project the examination results beyond the effective date of the report.

C. An opinion paragraph addressing the fairness of the management assertion in all material respects based on stated criteria.

D. A statement that the examination was made in accordance with AICPA standards and the examination provided a reasonable basis for an opinion.

[Anonymous]

Answer is A. Confused about why its A. I swear I've answered question about restricting the report when reporting on effectiveness of internal control?

[FAR_WARS]

I believe this question is about an SSAE examination of Internal Control. Therefore restriction of the report is not required

For audits (SAS), the communication of significant deficiencies and material weaknesses would include restricted use language. However in an audit of internal control effectiveness, no restriction on the use of the report is required.

*remember that this could be different under PCAOB/GAGAS/ISA

**Also, communication to mgmt/those charged w governance could be restricted, while the audit report itself is not restricted.

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

[csvirk]

Which of the following statements is correct about an auditor's required communication with those charged with governance?

A.
Any matters communicated to those charged with governance also are required to be communicated to the entity's management.

B.
The auditor is required to inform those charged with governance about significant errors discovered by the auditor and subsequently corrected by management.

C.
Disagreements with management about the application of accounting principles are required to be communicated in writing to those charged with governance.

D.
Weaknesses in internal control previously reported to those charged with governance are required to be communicated to those charged with governance after each subsequent audit until the weaknesses are corrected.

Correct answer B. But why C is incorrect?

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

[FAR_WARS]

Because not all communication with those charged w governance must be in writing. Anything not severe enough to count as a significant deficiency/material weakness could be communicated orally.

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

[cdn]

@ FAR_WARS, @ csvirk
The question: “The basic content of a report on management's assertion on the effectiveness of a non issuer's internal control includes all of the following items except:
A paragraph restricting use of the report only to management and specified third parties.
B. A statement on the inherent limitations of internal control, referring to the possibility of errors and irregularities, and suggesting that the reader not project the examination results beyond the effective date of the report.
C. An opinion paragraph addressing the fairness of the management assertion in all material respects based on stated criteria.
D. A statement that the examination was made in accordance with AICPA standards and the examination provided a reasonable basis for an opinion.

How do you know is SSAE not SAS? or SSARS?

I get always confused about it.

[FAR_WARS]

An SSAE engagement is an exam, review, or agreed-upon procedures engagement where we report on an assertion/subject matter that is the responsibility of another party.

“report on management's assertion” in this question tells me that this is SSAE.

SAS is audits of nonissuers, reviews of INTERIM statements.

SSARS is compilations and most reviews.

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

[Author]

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