[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]

“Cutoff Testing” is a substantive procedure that applies to both the existence/occurrence and completeness assertions. If a multiple-choice question is asked, the specific details of the question determine the most directly related assertion.
&
“Cutoff” is an assertion in the “Transactions and Events” category

-Why does “Cutoff testing” not test the cutoff assertion?
-Are cutoff and completion sometimes the same assertion?

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

[FAR_WARS]

@peter:

I have kept my reading to a minimum and have just done MCQs over and over until it has made sense. When is your test?

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

[Pete]

February first 🙂

i failed with 62

[Pete]

@far_wars remember the question related to control risk that we need an explanation for was one week ago?

Did you find an answer to that question? I can't even locate the question?

[FAR_WARS]

Was this it?

When control risk is assessed as being low for assertions related to payroll, substantive tests of payroll balances most likely would be limited to applying analytical procedures and

A Recalculating payroll accruals.
B Observing the distribution of paychecks.
C Footing and cross footing the payroll register.
D Inspecting payroll tax returns.

Confusion was why is A better than C? I think because C would take more work and therefore be “less likely”.

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.

that one the answer is A, so why isn't d ?

[FAR_WARS]

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

I still disagree with this.

it should say:
To achieve a lower level of control risk, more assurance that the control procedures are operating effectively is required.

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

[Pete]

it's so tricky, so even the logic of D is perfect, but here it's the trick :

lthough some risk assessment procedures that the auditor performs to evaluate the design of controls and to determine that they have been implemented may not have been specifically designed as tests of controls, they may nevertheless provide audit evidence about the operating effectiveness of the controls and, consequently, serve as tests of controls

so you gonna need more evidence lol

[Pete]

thanks far_wars

[FAR_WARS]

the problem implies that CR is already “assessed” at low but the answer implies that we need to do more testing in order to make it low.

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

[Pete]

yeah it's confusing that's why I didn't convince with the answer

[for425]

Which of the following statements describes an auditor's obligation to identify deficiencies in the design or operation of internal control?

Incorrect A.
The auditor should design and apply tests of controls to discover significant deficiencies that could result in material misstatements.

Correct D.
The auditor need not search for significant deficiencies but should document and communicate any significant deficiencies that are discovered.

Can someone please help explain why A is incorrect?

FAR - 72, 81
BEC - 76
REG - 78
AUD - 61 (1/24), Retake (6/6)

Materials: Becker
FAR Retake: + Wiley TB
REG & AUD: + Ninja MCQ

[Anonymous]

When reporting deficiencies for a nonissuer it is recommended that auditor report by report release date, but a window extending 60 days beyond this date is acceptable.

How about reporting deficiencies as soon as discovered?

[Anonymous]

Well, just read early communication is also acceptable. Just unsure which I would put if I saw this question. Written or oral? and whats the most correct (appropriate) timing.

[FAR_WARS]

@for425:

Significant deficiencies are less pervasive than material weaknesses, so we have no responsibility to actively search for them. However we do communicate them should they come to our attention. A test could very easily discover a material weakness yet fail to discover a significant deficiency- and that is perfectly fine. We are only responsible for providing reasonable assurance against material weaknesses.

@Dmb2stepper:

I can't find anything for nonissuers, but GAGAS specifies to report deficiencies as soon as discovered if the urgency or significance of findings requires faster corrective actions or follow-up or when ongoing noncompliance undetected by management should be stopped.

For a nonissuer, a control deficiency can be communicated orally to management. A significant deficiency (more severe) shall be communicated in writing to both management and those charged w governance.

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

[Author]

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