[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

[Anonymous]

Answer:

C: Reliability level

E: Estimated error rate

H: Maximum tolerable rate

1.The reliability level – this is the probability of being right in placing reliance on an effective internal control accounting system. If the reliability level is 95%, the auditor has only a 5% risk of placing reliance on internal accounting control when the system is ineffective given a certain tolerable rate. After the auditor determines the reliability level, she can then choose the correct sampling table based on this level. “The risk of assessing control risk too low” is the risk that the assessed level of control risk based on the sample is less than the true operating effectiveness of the control.

2.The estimated error rate – this is also referred to as the estimated population occurrence rate (expressed in percentage terms). If the auditor does not know what the estimated error rate is, select a sample of 50 to estimate the population occurrence rate. If two errors were discovered, the estimated error rate would be (2/50), or 4%.

3.The maximum tolerable rate – this is the rate above which the auditor would place less than full reliance on the control being evaluated.

[se7en.14]

just to confirm, is gaap and gaas under PCAOB?

I think im starting to get confused with these guidances/standards…

[Anonymous]

GAAS for the audits of nonissuers are issued by the AICPA Auditing Standards Board (ASB) in the form of Statements on Auditing Standards (SAS). The PCAOB, who establishes auditing standards for issuers, has adopted most SASs. The PCAOB has also set its own standards, called Auditing Standards (AS), which replace SASs for audits of issuers.

[Anonymous]

@al0515 why B is not included in the correct answer? ( Assessing control risk too low)

[nissacof]

Negative assurance is not permissible in

1.Letters required by security underwriters for data pertinent to SEC registration statements.

2.Reports relating to the results of agreed upon procedures to one or more specified elements, accounts, or items of a financial statement.

3.Reports based upon a review engagement.

4.Reports based upon an audit of the interim financial statements of a closely held business entity.

BEC - 4/3/2014 (80)
FAR - 11/20/2014 (79)
AUD - 4/2/15 (81)
REG - 7/14/15 (80)

[Anonymous]

When there is a new auditor for the current year financial statements and comparative statements are being presented, the predecessor auditor is required to perform limited procedures to evaluate the continuing appropriateness of their report before it is reissued. They must read and compare the current and prior statements and also obtain representations from the successor auditor and client management. I know I remember reading about a similar situation in which the predecessor is only required to obtain representations from the successor auditor.

Does anyone know the difference? Thanks.

[Anonymous]

@nisacoff – is the answer 2? Agreed Upon Procedures engagements require no assurance at all, simply a report on procedures and findings?

[Anonymous]

Boricuainthehouse, I think it's because “Assessing control risk too low” is used to assess the sample size after you have already determined the simple size.

[Anonymous]

nisacoff, I'll go with #2 as well, reports relating to the results of agreed upon procedures to one or more specified elements, accounts, or items of a financial statement.

[nissacof]

DPD516 – the answer is 4….very confusing…

4.Reports based upon an audit of the interim financial statements of a closely held business entity.

when an audit is performed, negative assurance is not to be provided, regardless of whether the financial statements are for a fiscal or interim period.

In regards to your question about the representation letters – I agree that I also saw that the predecessor also require a letter from the management – but than I saw somewhere else that they only need the successor representation letter…so Im going to assume that they only need that 1 letter

BEC - 4/3/2014 (80)
FAR - 11/20/2014 (79)
AUD - 4/2/15 (81)
REG - 7/14/15 (80)

[Anonymous]

nissacof – that is a really interesting/confusing question.

I can understand why option 4 is acceptable since a review of interim financial statements is considered “unaudited” which is basically no assurance but I don't understand why option #2 can't also be right especially since no assurance can be provided under agreed-upon procedures. Any insight on this?

[WANNABE_CPA]

Hello everyone, i just got done with the Becker Final Exam #2, did not go well, got a 65. I thought i was better prepared than that, but did come across so many small details i got wrong. A little disappointed, but since i do not plan to extend the date, i think i have 2 days to make most of and review everything good. I am trending at 75% on Ninja, attempted 658 Questions in past 4 days. Any words of encouragement most welcome.

FAR : 68, 74, 83 Thank you God 🙂
BEC : 78 (8/27) 🙂
REG : 72 ,80 (2/25) 🙂
AUD : 69,67, 07/23

[TheFutureCPA]

@wannabe_cpa – stick with it! my trending scores in Gleim were quite a bit lower (trending around 60) than my exam score (87)! (I've heard Gleim is tough, but not 27 point turnaround)!!!!!! I would go all out for these couple 2 days reviewing. Focus on making your weak areas better (obvious). If you feel like you have a decent handle on some information and do OK on those MC's, skip that section and move on! Also, make sure to review some TBS if you get the chance!

AUD- 2/4/15- 87!
BEC- 2/19/15- 82!
FAR- 4/2/15- 78!
REG- 5/8/15- 76!

“A failure is not always a mistake. It may simply be the best one can do under the circumstances. The real mistake is to stop trying.”

[Anonymous]

@WANNABECPA From what I have read about the Becker final exam scores, you should add a 10% – 15% curve to your score. I scored around a 68% on my Final exam for the FAR section, and passed with an 82% so don't let that test be a source of discouragement. Take notes over what you got wrong and review them multiple times. If your weaknesses seem to come from a few particular sections, take multiple progress tests over those areas until you feel more comfortable.

Also – for a quicker way to review all of the important details in the text, I would recommend looking at the outlines on the Becker software. They are each between 6 to 9 pages for A1 – A6. It makes an 80 page chapter in the text less daunting to review. Good luck – confidence is key.

[mclam369]

BEC - 82
AUD - 4/7/2015
REG - 69, (May 2015)
FIN - July 2015

[Author]

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