[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/

[Anonymous]

Yes, I do believe it's $750 now.

[trish_1234]

@ doover give me a minute to find the answer again to double check …….

the question was

Which of the following is a true statement concerning an attest engagement to examine an entity’s internal control over financial reporting?

A. The practitioner relies on management’s assertion about the effectiveness of internal control.

B. Management relies on the practitioner’s audit in making the assertion about the effectiveness of internal control.

C. The responsible party evaluates the effectiveness of internal control.

D. Management agrees not to include the practitioner’s report in a general-use document.

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

[trish_1234]

amazing found the question so fast although I have 80 questions in that chapter lol the answer choices are in different order now so the correct answer is

Which of the following is a true statement concerning an attest engagement to examine an entity’s internal control over financial reporting?

A. Management agrees not to include the practitioner’s report in a general-use document.

B. The responsible party evaluates the effectiveness of internal control.

Answer (B) is correct.

As part of engagement performance for both AT 501 and AS No. 5, the practitioner should obtain from management a written assertion about internal control effectiveness.

C. The practitioner relies on management’s assertion about the effectiveness of internal control.

D. Management relies on the practitioner’s audit in making the assertion about the effectiveness of internal control.

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

[golfball7773]

@kiki – when did you take AUD last?

FAR: 63, 55, 62
REG: 65, 77*
AUD: Fail, 64, 71
BEC: 72, 74, 81

*expired

[jbarwick]

For Audit opinions, how big of an issue does something have to be for it to move from Qualified to Disclaimer? Below is a material amount but when does it move into being pervasive? Questions below in relation:

Restrictions imposed by a client prohibit the observation of physical inventories, which account for 35% of all assets. Alternative audit procedures cannot be applied, although the auditor was able to examine satisfactory evidence for all other items in the financial statements. The auditor should issue a(an):

a. “Except for” qualified opinion.

b. Unmodified opinion with an explanation in an emphasis-of-matter paragraph.

c. Qualified opinion with a basis for modification paragraph.

d. Disclaimer of opinion.

Choice “d” is correct. Restrictions of scope imposed on the audit of such a large (35%) asset would require a disclaimer of opinion.

Journey Started - January 2015
FAR - 4/2015 - Passed
AUD - 7/2015 - Passed
BEC - 8/2015 - Passed
REG - 11/12/2015 - Passed

[Livijill]

@ahugemistake While you're correct that the OMB raised the threshold to $750k, since it didn't go into place until 1/1 of the current year, the previous year's rules are tested until 7/1. So if you're taking the test this month, you answered the question wrong…but if you're taking it in the next window, you're right! So confusing.

Same thing covered a little while ago here: https://www.another71.com/cpa-exam-forum/topic/omb-circular-a-133

[okcpa2015]

The key thing to consider is if the amount would “pervasively” effect the financial statements.

If you think about, 35% of a companies B/S is a pretty huge chunk. I would look for clues in the question like, “Besides the material effect to this single account or assertion, the remaining amounts presented fairly,” for a qualified opinion.

FAR - 91
REG - 88
AUD - 98
BEC - 88

[okcpa2015]

Here is one that always gets me..

Question: In the course of an audit, the auditor realized that an internal control is deficient, but elects not to test the control. The auditor has determined that:

a. the control would not present a reasonable possibility of material misstatement to the financial statements

b. the control would present the possibility of material misstatement to the financial statements

c. testing the control would result in inefficiencies in the audit process

d. testing the control is not part of the audit process

FAR - 91
REG - 88
AUD - 98
BEC - 88

[golfball7773]

a?

FAR: 63, 55, 62
REG: 65, 77*
AUD: Fail, 64, 71
BEC: 72, 74, 81

*expired

[okcpa2015]

@golfball you got it. For some reason I always come up with C though.

FAR - 91
REG - 88
AUD - 98
BEC - 88

[trish_1234]

Which of the following procedures would an auditor least likely perform before the balance sheet date?

A. Identification of related parties.

B. Confirmation of accounts payable.

C. Observation of merchandise inventory.

D. Assessment of the risks 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

[trish_1234]

Answer (B) is correct.

The most important assertion about accounts payable is completeness, which is best tested at year end. For example, the auditor may examine subsequent cash payments to determine whether the related payables are not recorded. Although confirmation is not a required auditing procedure, it may be useful in detecting unrecorded payables if the auditor’s sample includes vendors for which the risk of understatement is high, e.g., regular vendors with zero or low recorded balances.

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

[Anonymous]

I'll go with “B” confirm AP

[ahugemistake]

almost got me – LEAST likely – yep it's B

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[ahugemistake]

How are you guys memorizing the verbiage on the reports and the various letters etc. ?

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[Author]

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