[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/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[trish_1234]

@ martin this is nightmare

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

[Martin]

NoraU, I think first he has to see if alternative procedure would do the trick, If the auditor cannot apply alternative procedures, he must advise the client to prevent future reliance on the report by communicating to its creditors that the report cannot be relied upon.

When the omission of a procedure impairs the auditor's ability to support the previously expressed opinion, the first step is for the auditor to apply the omitted procedure.

If the client refuses to make the necessary disclosures, the next step would be for the auditor to contact the board of directors and notify each member of the board that he will (1) notify the client that the auditor's report can no longer be associated with the financial statements, (2) notify any regulatory agencies with jurisdiction that the auditor's report cannot be relied upon, and (3) directly notify each person known to the auditor to be relying on the financial statements that they cannot be relied upon (contacting the SEC and the stock exchanges, if necessary).

The auditor's report would not be reissued with an emphasis-of-matter or other-matter paragraph.

Through God all things can happen!

“You never fail until you stop trying.”
― Albert Einstein
When I was young, I used to admire intelligent people;as I grow older, I admire kind people.
“Just keep swimming, just keep swimming.”

FAR= 72-84
Audit= 73-82
BEC= 74-75
Reg=77

[trish_1234]

An auditor's program for the examination of long-term debt should include steps that require the:

A.

inspection of the accounts payable subsidiary ledger.

B.

investigation of credits to the bond interest income account.

C.

verification of the existence of the bondholders.

D.

examination of any bond trust indenture.

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

[trish_1234]

I thought this one was a good one…never saw this type of question before

An auditor intends to use the work of an actuary who has a relationship with the client. Under these circumstances, the auditor:

A.

is required to disclose the contractual relationship in the auditor's report.

B.

should assess the risk that the actuary's objectivity might be impaired.

C.

is not permitted to rely on the actuary because of a lack of independence.

D.

should communicate this matter to the audit committee as a significant deficiency.

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

[Martin]

B.

should assess the risk that the actuary's objectivity might be impaired.

Through God all things can happen!

“You never fail until you stop trying.”
― Albert Einstein
When I was young, I used to admire intelligent people;as I grow older, I admire kind people.
“Just keep swimming, just keep swimming.”

FAR= 72-84
Audit= 73-82
BEC= 74-75
Reg=77

[trish_1234]

B

Using the work of a specialist is an important decision, because the auditor is relying on this person to provide audit evidence on complex matters in which the auditor may not be an expert. When the auditor expresses an unmodified opinion on the financial statements, he does not mention the work of the specialist in the audit report.

The auditor should be concerned with the professional credentials, reputation, and experience of the specialist. Knowing that the specialist may have a tendency to produce information in the client's favor may cause the auditor to apply additional procedures to the specialist's findings or assumptions. In other words, the auditor should assess the risk that the actuary's objectivity might be impaired.

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

[ladybossxo]

Trish: Is the answer to your first question D?

CPA Exams Done.

[NoraU]

Thank you guys for explaining!

I would say D too for the first question.

BEC 05/12/14 77
REG 08/25/14 82
FAR 11/25/14 80
AUD 02/25/15 72, 05/15/15 98! DONE!!!!!!!!!!!!!!!!!!!!!!

[trish_1234]

@ lady, I

D

Examination of the trust indenture is the best answer because this step relates to both the assertions of rights and obligations and of presentation and disclosure. By examining the bond trust indenture, the auditor verifies the obligation as it is shown, its validity, and that none of the covenants are violated. If covenants are violated, the auditor verifies that proper disclosure has been made.

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

[trish_1234]

So here is question … the explanation is weird

Comparative financial statements include the prior year's statements that were audited by a predecessor auditor whose report is not presented. If the predecessor's report was unmodified, the successor should:

A.

add an emphasis-of-matter paragraph that expresses only limited assurance concerning the fair presentation of the prior year's financial statements.

B.

express an opinion only on the current year's financial statements and make no reference to the prior year's financial statements.

C.

indicate in the auditor's report that the predecessor auditor expressed an unmodified opinion on the prior year's financial statements.

D.

obtain a letter of representations from the predecessor auditor concerning any matters that might affect the successor's opinion.

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

[ladybossxo]

@Trish: This is hard. I know A and D are wrong. B??

CPA Exams Done.

[trish_1234]

I answer this question by knowing the others were wrong too… Here is the thing I thought it would be mentioned in “other matter paragraph not in the introductory… Im looking it up in the book now

c

If the prior-period financials have been audited by a predecessor auditor whose report is not presented, the successor auditor should indicate that fact in the introductory paragraph of the audit report, along with the date and type (qualified, unmodified, etc.) of the predecessor auditor's report.

Any financial statements presented with the audit report must be mentioned in the audit report for the comparative statements. The auditor does not have the option to ignore the prior year's financials, even if they were audited by someone else. Any amount of assurance (even limited assurance) expressed by the current auditor regarding the prior year's statements would require that audit procedures be performed in order to support that opinion. The current auditor is not required to obtain any representations from the predecessor auditor concerning the prior year's statements.

Terms

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

[trish_1234]

as I suspected according to gleim

“other matter paragraph” added to auditors report to reference predecessor's report

example

other matter

The FS of x company as of december 31, yr 1 were audited by another audiitors whose report dated march 31, yr 2 expressed an unmodified opinion on those statements

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

[ladybossxo]

Hmm. That was a good question!

CPA Exams Done.

[Martin]

C.

indicate in the auditor's report that the predecessor auditor expressed an unmodified opinion on the prior year's financial statements.

Through God all things can happen!

“You never fail until you stop trying.”
― Albert Einstein
When I was young, I used to admire intelligent people;as I grow older, I admire kind people.
“Just keep swimming, just keep swimming.”

FAR= 72-84
Audit= 73-82
BEC= 74-75
Reg=77

[Author]

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