[jeff]

Welcome to the Q2 2015 CPA Exam Study Group for AUD.

World Premier: “Unmodified” (Audit Reports Rap Video) 🙂

Posted by Another71 on Thursday, November 13, 2014

Free NINJA: https://www.another71.com/cpa-exam-study-plan/

[trish_1234]

@cortes123 You are sying things the opposite way. Hope this helps…

allowable risk of overreliance increased the smaller the sample size.

What they are saying is that: as the auditor increased the ALLOWABLE risk of averreliance ( the auditor is accepting MORE risk) the sample size decreases…..

So with that said if the auditor decreases the allowable risk of averreliance (the auditor is willing to accept LESS risk) the sample size will increase

so with that said if the auditor is NOT willing to accept any risk than the auditor has to test the whole population which is the reason the auditor has to accept some risk (thus sample risk)

Another way you can look at it which makes it easy

100% = population

5% = the auditors sample risk ( the auditor is willing to accept only being 5% wrong that the sample will not represent the population

95%= so the auditor will be 95% confident that the results represent the population.

Watch how this changes

100%=population

10% = the auditor sample risk (the auditor is willing to accept more risk!! (idk maybe the auditor thinks the chances are slim that a MM exists due to pass experience or control risk in Risk assessment were low)

90% = so now the auditor is only 90% confident that the sample results represent the polulation

so if the auditor is willing to accept more risk the sample size decreases…

if the auditor is willing to accept less risk the sample size increases…

if the auditor is willing to accept NO risk the auditor will have to test the whole population, (so maybe the auditor should not rely on controls bc we need to accept some risk to do sample right?) ….

Hope this helps 🙂 .

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[Anonymous]

Now I get it!! I was seeing an increase in the risk of incorrect acceptance as an assessment of the CR being bad when in fact is the other way around. If I am more willing to accept an incorrect sample is because the CR is relative low. Thanks!!!!

[trish_1234]

you got it 🙂

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[sgustin]

I took my exam Saturday, had to drive 3 hours to Austin because all the exam spots were taken in the Dallas Fort Worth Area. I used the AL for a bunch of my SIMS. Some were word for word from the AL. definitely utilize this tool when doing SIMS!

I'm not sure I did good on the multiple choice though, I am praying for a passing score!

A - (64) (73) (75)
R - (82)
F - (67)
B -

[Anonymous]

So, if detection risk is decreased (meaning a larger sample size) what would this do to the risk of incorrect acceptance?

[trish_1234]

@dpad dont mix up detection risk with the allowable risk of overreliance

this is what I think and understand:

Audit risk = inherent risk x control risk x detection risk (used in planing and performing audits evaluating results and forming opinion) Detection risk is inversely related to the assessed RMM at the assertion level.

and allowable risk of overreliance refers to amount of risk the auditor is willing to take that the sample is representative to the population.

so example:

after performing risk assessment the auditor concludes that detection risk (the risk that the procedures performed by the auditor to reduce audit risk to an acceptable low level will not detect a MM) is high so the auditor needs to increase the effectiveness of the audit.

example assign more experienced personal etc

So because detection risk is high

the auditor will take less risk in sampling which in turn we may reduce the allowable risk of overreliance from 10% to 5% which we will need to increase sample size (we use tables for this )

in review the auditor will consider all the evidence gathered and will re assess Audit Risk to see if it is acceptably low to issue report

and hear comes the fun part …………… its the auditors judgement -_-

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[trish_1234]

PS; detection risk may be assessed as low for payroll but high for accounts receivable

so the auditor will perform the minimal procedures on payroll and focus on receivables to reduce audit risk to acceptable level

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[trish_1234]

good question to demonstrate how Audit risk = inherent risk x control risk x detection risk Risk assessment process:

Risk of a material misstatement of recognized revenue is likely to be high due to which of the following?

A.

The significant judgment involved in the interpretation of the accounting principles surrounding revenue recognition.

B.

More transactions center around the revenue accounts than any other accounts in the chart of accounts.

C.

Both the significant judgment involved in the interpretation of the accounting principles surrounding revenue recognition, and more transactions center around the revenue accounts than any other accounts in the chart of accounts.

D.

Recognized revenue does not have a high risk of material misstatement.

AUD 69, 92 7/15 Gleim and Ninja test bank
FAR sometime in 10/15 Gleim
BEC not taken
REG not taken

[Anonymous]

Took audit on Saturday, I'll be honest. This is the first time I was able to get through all of the material, and have time to review MC's and SIMS before the exam. I wouldn't say I felt better coming out of the exam, in the amount of material I knew. There were certainly give me questions, as there have been before without seriously studying. The only difference this time was that I walked out of there knowing that had I put any additional study time in, I probably wouldn't have gotten much more incremental information out of it. Keeping my fingers crossed for the first exam I really fully tried on and got through all the material for.

[Anonymous]

@trish

Is it C?

I am now convinced that I will have to retake this test 🙁 I am working the Ninja MCQs and I am still trending on the 80%. Did you guys reset the MCQs for your retakes or continued on your previous sessions?

I am planning to go over the book again and work as many MCQs as possible. I listen to Ninja Audio on my way to work and back and will be alternating between Becker and Ninja MCQ. Any advise on anything different to try?

[pracap]

Does anybody have the recent updates for Audit exam July/Aug

[Author]

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