[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

[payaza2000]

@red_rose Questions on the top of the page
1)B
2)B

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]

At a minimum how often is the PCAOB required to inspect registered public accounting firms?

I think I saw 3 years, but have also seen annual inspections as an answer

[FAR_WARS]

Thanks for the encouragement everyone- I always find studying on here much less painful than solo out of the textbook.

@Red_rose:
1) B
2) B

what study material is this from?

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

[FAR_WARS]

@Dmb2stepper

-PCAOB requires a peer review every 3 years. This is performed by someone outside our firm.

-A Concurring/second partner review is required for each audit report issued. This is performed by someone within our firm.

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

[red_rose]

@ everyone: the correct answers are:

C. Controls appear to be effective so that the preliminary control risk assessment is low., and

B. The ability of the accounting system to generate reliable information and convey it in a timely manner to those parties within the organization that need it

I use Wiley for me. and the supplemental ?'s come from cpareviewforfree.com It's definitely helped me 🙂

[red_rose]

@ DMB2stepper & FAR _WARS: I thought a PCAOB review was annually for companies that conduct over 100 audits in a year (like the Big 4 firms) and every 3 years for other companies that conduct less than 100.

This is directly from the PCAOB website: “The Act requires the Board to conduct those inspections annually for firms that regularly provide audit reports for more than 100 issuers, and at least triennially for firms that regularly provide audit reports for 100 or fewer issuers.”

[FAR_WARS]

An increased extent of the tests of controls is most likely to occur under which of the following situations?

“C. Controls appear to be effective so that the preliminary control risk assessment is low.”

For efficiency? Controls appear effective, so we test them, get CR low, then we don't have to do as much substantive testing???

EDIT: am still confused over this question. Here is a question that seems to contradict:

Regardless of the assessed level of control risk, an auditor would perform some:

a. Tests of controls to determine the effectiveness of internal control.
b. Analytical procedures to verify the design of internal control.
c. Dual purpose tests to evaluate both the risk of monetary misstatement and preliminary control risk
d. Substantive tests to restrict detection risk for significant transaction classes.

d is correct

Choice “a” is incorrect. An auditor generally would not perform tests of controls if it would not be efficient to do so.

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

[red_rose]

@ far wars: i dont remember the explanation, but here's how i got the correct answer.

A. I weeded it out
D. I weeded that out too.

I said B is incorrect because if the system of controls are ineffective, why would you want to increase the extent of tests? The auditor knows that you cant rely on it. So that left C. Sometimes that's how I get to the correct answer, process of reasoning & elimination. Hope this helps

[FAR_WARS]

@Red_Rose:

Nice find. What I posted previously is a different requirement.

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

[If I can, u can too!]

1) C, great question.
2) B

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).

[payaza2000]

ugghh Demoralized took a Becker Practice exam, and did terrible.

T1 (MCQ): 67%
T2 (MCQ): 71%
T3 (MCQ): 60%

T4 (Sims):

1: Risk SIM: 70%
2: Internal Control SIM:100%
3: Statistical Sampling SIM: 50% (Damn you PPS)
4: Comparative Financial Statements SIM: 62%
5: Government Auditing SIM:80%
6: Research SIM: 67%

Going to hit Ninja like crazy. Exam date next Wednesday.

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

[Oneday]

I thought the answer to this question was D since I thought lower the control risk, less testing is required (combined approach). Please explain to me why answer is not D and the answer is A…

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

Correct 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.

Incorrect D.
The lower the assessed level of control risk, the less assurance the evidence must provide that the control activities are operating effectively.

[FAR_WARS]

The wording is very tricky.

Think of it this way- If CR is at Maximum, we skip TOC altogether because they would be pointless. Vice Versa- if CR is minimum, we must have tested controls extensively in order to get it that low.

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

[Oneday]

Sigh…. I understand now.. Thank you and good luck on your AUD test!

[Oneday]

One more question…

I thought the answer A for this question was correct and all others are “piecemeal” related. But i was found wronged.. Why is it?

An auditor may express an opinion on an entity's accounts receivable balance even if the auditor has disclaimed an opinion on the financial statements taken as a whole, provided the:

Incorrect A.
report on the accounts receivable discloses the reason for the disclaimer of opinion on the financial statements.

B.
distribution of the report on the accounts receivable is restricted to internal use only.

C.
auditor also reports on the current asset portion of the entity's balance sheet.

Correct D.
report on the accounts receivable is presented separately from the disclaimer of opinion on the financial statements.

[Author]

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