[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

[payaza2000]

From the Auditing Standards (AU-C 700)

.A44 Because the auditor's report on comparative financial statements applies
to the financial statements for each of the periods presented, the auditor
may express a qualified opinion or an adverse opinion, disclaim an opinion, or
include an emphasis-of-matter paragraph with respect to one or more financial
statements for one or more periods while expressing a different auditor's
opinion on one or more financial statements of another period presented.

This would not be piecemeal opinions because they are from different periods? Also Hypothetically speaking let say I give an Unmodified Opinion on the Income Statement, but disclaim the Balance Sheet. This is Permissible because I havent actually given an opinion? Thanks.

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

[FAR_WARS]

A piecemeal opinion (not allowed) is giving an opinion on part of a financial statement.
i.e. “The AR is unmodified, but the Balance Sheet is qualified.”

This is often confused with stating an opinion on one statement, and a different opinion on the other statements, which is allowed.

Does that help?

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

[Oneday]

Which of the following procedures most likely could assist an auditor in identifying related party transactions?

A.Performing tests of controls concerning the segregation of duties
B.Evaluating the reasonableness of management's accounting estimates
C.Reviewing confirmations of compensating balance arrangements
D.Scanning the accounting records for recurring transactions

Can someone explain how the answer C is correct answer? Isnt compensating balance certain minimum amount that bank requires its customer keep in their account? im not sure how this relates to related party transaction.

[FAR_WARS]

from AU-C 550, one of the procedures an auditor should perform to identify transactions with related parties is,

“Review confirmations of compensating balance arrangements for indications that balances are or were maintained for or by related parties.”

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

[PassingConfirmsMateriality]

Auditing– last section for me, let's do this!

It is so very dry and boring. I never liked auditing. Anyone have any study tips besides drinking?

FAR - 94
BEC - 95
REG - 92
AUD - 97

Passing the exam means never having to hear Tim Gearty say "again" again

[amandafaith15]

@PassingConfirmsMateriality I think with those scores you should be giving us advice 🙂

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

[payaza2000]

@FAR_WARS

I was under the impression that a piecemeal opinion would be giving an unmodified opinion on one statement (I/S), and a qualified opinion on another (B/S). From the standards AU-C 705

.07 The auditor should modify the opinion in the auditor's report when
a. the auditor concludes that, based on the audit evidence obtained,
the financial statements as a whole are materially misstated or
(Ref: par. .A2–.A7)

Also AU-C 805

09 If the auditor is not also engaged to audit the entity's complete set
of financial statements, the auditor should determine whether the audit of a
single financial statement or a specific element of those financial statements
in accordance with GAAS is practicable. The auditor should also determine
whether the auditor will be able to perform procedures on interrelated items,
as required by paragraph .13.

.22 A single financial statement is deemed to constitute a major portion
of a complete set of financial statements. Therefore, the auditor should not
express an unmodified opinion on a single financial statement of a complete
set of financial statements if the auditor has expressed an adverse opinion or
disclaimed an opinion on the complete set of financial statements as a whole,
even if the auditor's report on the single financial statement is neither published
together with nor otherwise accompanies the auditor's report containing the
adverse opinion or disclaimer of opinion. (Ref: par. .A21)

I could be wrong, maybe someone else wants to chime in. I find the authoritative literature WORDY.

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

[monikernc]

See also AUC705.15 which also refers you to AUC705.A17. AUC705.A17 allows for an unmodified opinion on balance sheet and disclaimer on income stmt and cash flows only for an INITIAL audit. See also AUC510.a17
You can however, under a different standard which i can't quote off top of my head, can give an opinion on one financial statement only if access to underlying information to other statements is not restricted.

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

[amandafaith15]

I think the key is whether you were engaged to express an opinion on 1 financial statement or all the financial statements.

So if you were only engaged to give an opinion on the Balance sheet you could only give an opinion on that. But, if you were engaged to give an opinion on all the Financial Statements and you disclaimed an opinion on the Income Statement but gave an Unmodified opinion on the Balance Sheet – that would not be allowed.

That is what I understand AU-805.22 to say.

AU-805.09 seems to say that you should only accept an engagement to express and opinion on 1 financial statement if there are no scope limitations in doing so.

That's my interpretation.

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

[FAR_WARS]

Thanks all, i will find some mcqs to practice on piecemeal opinions, as well as on audits of single financial statements/specific elements

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

[payaza2000]

The Auditors Report Should include Reference to the United States as the country of origin of:

I) The Accounting Principles used to Prepare the Financial Statements
II) The Auditing Standards the Auditor Followed in Performing the Audit

a) Both I & II
b) Neither I or II
C) I Only
D) II Only

The Correct Answer according to Becker is A; but my question is Why is not D? If you are using IFRS you are using Accounting Principles used outside the United States? Help would be appreciated.

From the authoritative literature AU-C700

.13 The auditor should form an opinion on whether the financial statements
are presented fairly, in all material respects, in accordance with the
applicable financial reporting framework.

Also

31 The auditor's report should state that the audit was conducted in accordance
with generally accepted auditing standards and should identify the
United States of America as the country of origin of those standards. The auditor's
report should also explain that those standards require that the auditor
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement. (Ref: par. .A27–.A28)

It doesn't specify that the “applicable reporting framework” had to originate in the United States

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

[FAR_WARS]

I agree, That is a stupid question!

An audit of IFRS statements would be considered an OCBA >>>> Regulatory Basis, right?

The Regulatory Basis report would then state, “the statements were prepared using a basis of accounting other than accounting principles generally accepted in the United States of America”

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

[payaza2000]

Yeah I know it is a dumb question also I found this in the Authoritaitive Literature.

AUC700

36 The auditor's opinion should identify the applicable financial reporting
framework and its origin. (Ref: par. .A31)

.A31 Description of the applicable financial reporting framework and how
it may affect the auditor's opinion (Ref: par. .36). The identification of the applicable
financial reporting framework in the auditor's opinion is intended to
advise users of the auditor's report of the context in which the auditor's opinion
is expressed; it is not intended to limit the evaluation required in paragraph
.17. For example, the applicable financial reporting framework may be identi-
fied as accounting principles generally accepted in the United States of America
or U.S. generally accepted accounting principles or International Financial
Reporting Standards promulgated by the International Accounting Standards
Board (IASB) or International Financial Reporting Standard for Small and
Medium-Sized Entities promulgated by the IASB.

So nowhere does it limit the Accounting Principles to those that have originated in the USA, could anyone elaborate. Plz & 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

[Oneday]

The standard report issued by an accountant after reviewing the financial statements of a nonissuer should state that:

A.the objective of a review is to assist management in presenting financial information in the form of financial statements.
B.we are not required to perform any procedures to verify the accuracy or completeness of the information.
C.the accountant does express an opinion or any other form of assurance on the financial statements.
D.the accountant did not obtain an understanding of the entity's internal control or assess control risk.

Answer: B
Explanation:
The following form of standard report is used for a review:
Example
“We are not required to, and will not, verify the accuracy or completeness of the information you will provide to us for the engagement or otherwise gather evidence for the purpose of expressing an opinion or a conclusion. Accordingly, we will NOT(????) express an opinion or a conclusion nor provide any assurance on the financial statements.”
—————–
This question confused me. How should I distinguish whether this is asking for AR-C 90 “Review” procedure or other procedure such as AR-C 70 “compilation”/AR-C 60 “preparation of financial statement”?

The wording seemed to point at AR-C 90 “review” procedure so I thought the answer would NOT be B since AR-C 90 does require “Limited Assurance”. But answer IS B :/……….And that example explanation confuse even more.

[FAR_WARS]

Definitely not AR-C 70 or AR-C 60, since compilations and preparations are other types of engagements.

AR-C 90 is for reviews of nonissuer, noninterim statements, and appears to be what the question is asking about.

Answer is B because a review is only limited assurance. Therefore we are not REQUIRED to perform any procedures to verify the accuracy or completeness of the information. (tho a review primarily consists of inquiries and analytical procedures)

Also look here, someone else had an issue with this Question:
https://www.another71.com/cpa-exam-forum/topic/audit-question-is-ninja-wrong

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

[Author]

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