[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

[Pete]

I saw that post has good questions about ethics chapter

https://www.another71.com/cpa-exam-forum/topic/ethics-questions-please-help

my answers will be

1- b

2-b

3-b

4-c ( i am not sure )

5-d

[Pandarama]

@payaza2000- I'm going to give you my manager and senior worker's favorite response, “it depends”. In NJ, we have all sorts of regulations the schools need to follow for reporting purposes. There are some items that are no where near the materiality level, but because of the type of transaction, it requires us/them to fix the issue.

My clients are pretty good about not fighting the journal entries though because of these rules. It's really easy for me to pull out some state laws and then the client realizes they have no choice.

I'm assuming it works somewhat similar in other industries though, where the type of transaction may require the materiality level to be thrown out.

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.

[FAR_WARS]

What is the difference between a projection and pro forma statements?

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

[Pete]

when the risk of material misstatement is high, the less detection risk will be required , the more persuasive the audit evidence required by the auditor.

my question here is the RMM is low and DR is high, the less persuasive audit evidence required by the auditor ?

[FAR_WARS]

@peter:
Sounds right to me. The relationship between RMM and DR is always indirect. The relationship between RMM and work performed/evidence gathered is always direct.

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

[Pandarama]

@far_wars:

Pro forma – “Historical statement adjusted for the effects of a future transaction” < this was my favorite definition found online. It's also a form of a projection. “What if” scenarios. Another key difference: pro forma statements use your current financial information.

Projection – Hypothetical situation; doesn't have to use current financial data.

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.

[csvirk]

The procedure, “The accountant should communicate illegal employee acts is:

A.
required for a review only.

Incorrect B.
required for both a compilation and a review.

C.
not required for a review but required for a compilation.

D.
not required for either a compilation or a review.

Correct answer is D and Following is the explanation given:

As a result of the limited procedures performed in a compilation and a review, evidence or information may come to the accountant's attention that noncompliance with laws and regulations may have occurred. In this case, the matter should be brought to the attention of the appropriate level of management. The accountant is not required to report matters regarding illegal acts [noncompliance] that are clearly inconsequential.

When they talk about communication, What does they referring to? Communication to third parties or senior management?

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

[FAR_WARS]

Communication to third parties within the review or compilation report is not required. Communication to the appropriate level of management should still happen.

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

[Pete]

Which of the following statements is correct concerning an auditor's assessment of control risk?

A. Assessing control risk may be performed concurrently during an audit with obtaining an understanding of the entity's internal control.
B. Evidence about the operation of control activities in prior audits may not be considered during the current year's assessment of control risk.
C. The basis for an auditor's conclusions about the assessed level of control need not be documented unless control risk is assessed at the maximum level.
D. The lower the assessed level of control risk, the less assurance the evidence must provide that the control activities are operating effectively.

the answer is a, why is not d ?

[FAR_WARS]

Wiley says:
(d) is incorrect because a lower level of control risk requires more assurance that the control procedures are operating effectively.

At first this did not make sense to me, but i think it is because to get CR down to a low level, we must have MORE assurance that control activities are operating effectively.

Anyone have a better explanation?

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

[Pete]

if the CR is high, you must have more assurance that IC is effective, right ?

so if CR is low, you must have less assurance that IC is effective ?

anyone please correct me ?

[Pete]

An auditor concludes that a substantive auditing procedure considered necessary during the prior period's audit was omitted. Which of the following factors would most likely cause the auditor promptly to apply the omitted procedure?

Incorrect A.
There are no alternative procedures available to provide the same evidence as the omitted procedure.

B.
The omission of the procedure impairs the auditor's present ability to support the previously expressed opinion.

C.
The source documents needed to perform the omitted procedure are still available.

D.
The auditor's opinion on the prior period's financial statements was unmodified.

the answer is b, why is not a ?

[FAR_WARS]

If the omitted procedure does not impair the auditors ability to support the previously expressed opinion, we may chose to just skip it all together. It was not material.

To me A is not necessarily wrong, but B is the “better” answer.

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

[ruggercpa2b]

During the exam you can find a sample audit report. It's great to know the basics on what is in the report because of MCQs. On SIMs you can do a search and are able to find a full report if you have a fill in the blank simulation. You might not be able to search in the review course software because a lot them do not have the full AL.

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.

[Pete]

But when we know that there are omission procedures, the first thing we see if there are alternative procedure support our opinion, right ? after that if the alternative procedures are not applied we apply those omitted procedures

[Author]

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