[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]

During the annual audit of Ajax Corp., a publicly held company, Jones, CPA, a continuing auditor, determined that illegal political contributions had been made during each of the past seven years, including the year under audit. Jones notified the board of directors about the illegal contributions, but they refused to take any action because the amounts involved were immaterial to the financial statements.

Jones should reconsider the intended degree of reliance to be placed on the:

a.

Prior year's audit plan.

b.

Management representation letter.

c.

Preliminary judgment about materiality levels.

d.

Letter of audit inquiry to the client's attorney.

This is a question from A3, and I cant find anywhere in the book at that point where they talk about the degree of reliance. Is this something I should just know cause of common sense?

[trish_1234]

b

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

[trish_1234]

Yes. Management representation letter may not be reliable… auditor uses judgement.

this question is word for word in gleim too

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

[Martin]

B

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

[Anonymous]

Here are a couple questions from a SIM:

As part of the audit planning process, which of the following inquiries would be made of the predecessor auditor? Choose “Yes” or “No”

1. Information that might bear on the integrity of management

2. The predecessor auditor’s understanding as to the reasons for the change of auditors

[ladybossxo]

Yes and Yes

CPA Exams Done.

[Martin]

Y and Y

ladybossxo, when is your test? How are you doing with Ninja MC. Im still at 82% average,but when i took the exam I was at 74%.

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

[Martin]

I have a quick question fro anyone. In an attestation engagement, when you report on the subject matter rather than the assertion about the subject matter, do you have to restrict use on all the reports?

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

[Anonymous]

Answer is D. However, why this MCQ is related to a REVIEW on a pro-forma of the financial information? As my understanding, only examination, compilation and agreed upon procedures reports are express in the Pro forma information. Any help will be very appreciate!

Thanks in advance!

An accountant's report on a review of pro forma financial information should include a:

A. statement that the entity's internal control was not relied on in the review.

B. disclaimer of opinion on the financial statements from which the pro forma financial information is derived.

C.caveat that it is uncertain whether the transaction or event reflected in the pro forma financial information will ever occur.

D. reference to the financial statements from which the historical financial information is derived.

[Martin]

As far as I know, proforma statements belong in the category of attestation engagements, and in that category, you only do examinations and reviews. When you report on supplementary info,specified accounts,MD&A,Profoma,etc you need to make sure they come from audited fs. This happens so that Auditors can cover their a$4$es when reporting on those 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

[Anonymous]

Great explanation! thanks @ Martin

[Anonymous]

You guys are right! Yes and Yes.

I said no to both because the question asks if they are part of the audit planning process…I thought they would be part of the decision to accept the engagement, not part of the audit planning process!

[plotikkk85]

Which of the following statements is correct concerning statistical sampling in tests of controls?

a. Deviations from specific control activities at a given rate ordinarily result in misstatements at a lower rate.

b. As the population size increases, the sample size should increase proportionately.

c. In determining tolerable rate, an auditor considers detection risk and the sample size.

d. There is an inverse relationship between the expected population deviation rate and the sample size.

[ladybossxo]

Martin! I am averaging 88% (doing the MCQs by category/topics). I have yet to do the Becker practice exams. I am taking it on the 15th!! How about you?

CPA Exams Done.

[plotikkk85]

A – Deviations from control activities do not necessarily result in misstatements. Therefore, deviations from pertinent control activities at a given rate would ordinarily be expected to result in misstatements at a lower rate.

[Author]

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