[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]

@cpa2bee

the answer will be B

[Pete]

1-Which of the following items would most likely require an adjustment to the financial statements for the year ended December 31, year 1?

a-Uninsured loss of inventories purchased in year 1 as a result of a flood in year 2.
b-Settlement of litigation in year 2 over an event that occurred in year 2.
c-Loss on an uncollectible trade receivable recorded in year 1 from a customer that declared bankruptcy in year 2.
d-Proceeds from a capital stock issuance in year 2 which was being approved by the board of directors in year 1.

[Pete]

2-Which of the following procedures would an auditor most likely perform to verify management’s assertion of completeness?

a-Compare a sample of shipping documents to related sales invoices.
b-Observe the client’s distribution of payroll checks.
c-Confirm a sample of recorded receivables by direct communication with the debtors.
d-Review standard bank confirmations for indications of kiting.

[kei]

@peter A.

life takes bravery.

[Pete]

1- c

2-a

[Oneday]

A CPA firm has decided to rely on the audit work performed by another audit firm. Which of the following procedures should the CPA firm perform when taking responsibility for the other firm's audit work?

A. CORRECT***
Review the other firm's audit workpapers and reperform a subset of audit testing to validate the firm's conclusions

B.
Reference the reliance on the other firm's work in a footnote disclosure to the financial statements

C.
Reference the reliance on the other firm's work in the first paragraph of the opinion in the audit report

D.
Obtain and attach a copy of the other firm's representation letter and audit report to the opinion that the CPA firm issues

Why is A correct answer? The explanation of this question confuses me further. Here's the explanation:

“If two or more auditors examine a portion of a client's financial statements, the decision must be made as to who the principal auditor is. Normally the auditor who has examined the major portion of the financial statements is the principal auditor, and he or she will issue the audit opinion. If the principal auditor is able to satisfy himself or herself about the quality of another auditor's work and is willing to take responsibility for that work, no mention of the other auditor is necessary. The type of opinion (unmodified, qualified, adverse, or disclaimer of opinion) is not relevant. However, if the principal auditor is unable to satisfy himself or herself about the quality of the other auditor's work, a reference to the quality of the other auditor's work is made and a clear separation of responsibilities is described in the audit opinion.”

[FAR_WARS]

@This

Pretend you are stealing someone else's homework. You will probably read it first to make sure that you want to claim it as your own. Then, If it is any good, you wlll erase their name and put your own. In this manner, you are taking full responsibility for their work, and making no reference to the original author.

stupid example, but maybe it will help!

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

[kei]

the explanation says:

“If the principal auditor is able to satisfy himself or herself about the quality of another auditor's work and is willing to take responsibility for that work, no mention of the other auditor is necessary.”

Letter B, C, D will only confuse the reader.

life takes bravery.

[If I can, u can too!]

i feel kei nailed it! good job!

Licensed CPA since Apr 16
Order in sequence of passing
FAR-71,71,79
BEC-80
REG-72,77
AUD-56,72,72,72,80! Thank you, thank you, thank you Lord!
FAR/BEC/AUD: Becker & Yaeger lectures (Wiley & Ninja MCQs). REG: Becker lectures (Ninja MCQs).

[swim4life107]

I'm retaking the test today. I haven't done a ton of re-reading. I think I spent too much time reading the textbook last time and it didn't really prepare me. I've mostly focused on MCQS (I did a 2700 MCQs on Ninja in under a month) and done a handful of simulations. I've answered 85% of the questions on Ninja correctly. I simply didn't have enough time to finish the rest.

Hoping this is the last time I'll have to think about audit.

BEC: 77 (08/20/15)
REG: 85 (10/10/15)
AUD: 59, 78 (01/06/16) NINJA MCQ IS A LIFESAVER!!!!
FAR: 77 (6/8/16)

ALL DONE!!! I AM PROOF THAT ANYONE CAN DO IT.

[csvirk]

Good Luck SWIM. Let us know your exam experience.

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

[csvirk]

Which of the following is usually a benefit of using electronic funds transfer for international cash transactions?

A.
Improvement of the audit trail for cash receipts and disbursements

B.
Creation of self-monitoring access controls

C.
Reduction of the frequency of data entry errors

D.
Off-site storage of source documents for cash transactions

Why does C is better answer than B?

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

[FAR_WARS]

c is correct because electronic funds transfer systems minimize the need for entry of information and, therefore, reduce the chance of entry errors.

Choice “b” is incorrect. Use of electronic funds transfer creates a need for more stringent access
controls. “self-monitoring” would be less work, but also less stringent.

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

[csvirk]

What are Type 1 and Type 2 reports related servicing Entity?

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

[FAR_WARS]

Probability proportional to size, cumulative monetary amount, and stratified are all types of variable sampling that can help mitigate a high variability population.

Is this a correct statement?

or is PPS its own type of sampling?

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

[Author]

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