[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

[amandafaith15]

@payaza2000 – I have the Wiley study guide (not the text book) and the NINJA notes – I feel they do a good job explaining the assertions. I also learned a lot about the assertions just by doing the NINJA MCQs and taking notes when I missed questions. Here is what I have in my notes:

Assertions on Account Balances:
-Presentation & disclosure: appropriately presented and adequately disclosed
-Existence – balances actually exist – tests for overstatements (mainly assets)
-Rights & Obligations – company has the rights to assets and owes liabilities
-Completeness – tests understatements – were all transactions recorded? (mainly liabilities)
-Valuation & Allocation – financial info is properly classified and valuated

Assertions on Transactions:
-Occurrence – did these transactions actually occur? start at F/S go down to supporting documents
-Cutoff – was the transaction recorded in the correct period?
-Classifications – were the transactions properly allocated and classified?
-Completeness – did all transactions that occurred get recorded? start at supporting documents and go up to F/S
-Accuracy – was everything recorded accurately?

Assertions on Disclosures:
-Occurrence – these events actually occurred
-Classification – disclosures are properly presented
-Completeness – disclosures are complete
-Accuracy – disclosures are accurate

Hope this can help!

REG -73 (8/2015) 81 (10/2015)
AUD - 73 (11/2015) 84 (1/2016)
BEC - 84 (2/2016)
FAR - 77 (6/2016)

[payaza2000]

@amandafaith15

Thank You.

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

[Pete]

1.260Loans, Leases, and Guarantees 1.260 Loans, Leases, and Guarantees 1.260.010 Loans .01 If a covered member has a loan to or from an attest client, any officer or director of the attest client, or ‘any individual owning 10 percent' or more of the attest client’s outstanding equity securities or other ownership interests, a self-interest threat to the covered member’s compliance with the “Independence Rule” [1.200.001] may exist. Threats would not be at an acceptable level and independence would be impaired if the loan exists during the period of the professional engagement..

so what's the difference with that rule “10%” and 5% rule that we know ?

any help ?

[Pete]

An auditor decides to issue a qualified opinion on an entity’s financial statements because a major inadequacy in its computerized accounting records prevents the auditor from applying necessary procedures. The opinion paragraph of the auditor’s report should state that the qualification pertains to:

Incorrect A.
a client-imposed scope limitation.

B.
a departure from generally accepted auditing standards.

C.
the possible effects on the financial statements.

D.
lack of access to necessary information.

the reason to be qualified is client-imposed limitation , why the answer is c ?

[payaza2000]

@peter

If i were to venture to guess it would be that the Client isnt limiting your scope, i.e it is not intentional.However it is a scope limitation, which could have possible effects on the Financial Statements.

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

[Pete]

oh I thought the same for one minute but I told myself it's a limitation

thanx payaza2000

how about the 10% rule do you know about it ?

[FAR_WARS]

Info I could find about a “5% rule”:

Unless you are a “covered member” you (or your immediate family) cannot owe more than 5% stock without impairing independence.

Info I could find about a “10% rule”:

anyone owning more than 10% of a company's stock must file a report indicating how many shares they own within 10 days of becoming a 10%+ owner.

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

[monikernc]

i found this while studying for aud and it has the 5% rules, and other topics emphasized in the review materials, laid out. and it is searchable.

https://www.aicpa.org/interestareas/professionalethics/resources/tools/downloadabledocuments/plain%20english%20guide.pdf

the PCAOB standards are here:

https://pcaobus.org/Standards/EI/pages/et101.aspx

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Progress]

Hi study group. In the AL, am I able to find any full sample reports for engagements? I am in A2 of Becker and doing some sims. I can't seem to find any.. any help pls?

[Pandarama]

@progress – no, samples aren't given. Same goes for REG. Could you imagine how easy some of the sims would be if you had samples of the tax return forms?

BEC - 80
AUD - 64, 75 - credit lost, 90!!
REG - 73, 74, 83
FAR - 61, 72, 85

Feels good finishing on my best note. Time to watch the mailbox.

[Progress]

@pandarama okay thanks! haha yes but thought i would ask! I know for FAR I could look up almost all my SIMS which helped out a lot. I thought audit was the same but maybe not.

[Pete]

A corporate balance sheet indicates that one of the corporate assets is a patent. An auditor will most likely obtain evidence regarding the continuing validity and existence of this patent by obtaining a written representation from

A. A patent attorney.
B. The patent inventor.
C. The patent owner.
D. A regional state patent office.

[FAR_WARS]

A. A patent attorney. (via a lawyer inquiry letter)

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

[Pete]

yes right answer FAR-WARS

[payaza2000]

A Question to the Auditors or those familiar with this problem. I am practicing the SIMS in Becker for Chapter 4, and I came across the one about recording the expense in the proper period (i.e dealing with Cutoff Assertion). The Materiality threshold is $6,000; and the first line item I got wrong was where $3,500 of legal expenses where recorded incorrectly in January, when they should of been recorded in December. The reasoning the software gave me was that it was underneath the materiality level.

Question is in “Real Life.” would you propose that the Client make the Adjusting Entry; and if they refuse you just ignore it since its below materiality level. Or would you just not propose the Adjusting Entry all together.

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

[Author]

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