[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]

When an accountant is engaged to compile a nonissuer's financial statements that omit substantially all disclosures required by GAAP, the accountant should indicate in the compilation report that the financial statements are:

A. not designed for those who are uninformed about omitted disclosures.

B. prepared in conformity with a comprehensive basis of accounting other than GAAP.

C. not compiled in accordance with Statements on Standards for Accounting and Review Services.

D. special-purpose financial statements that are not comparable to those of prior periods.

[okcpa2015]

A on this one.

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

[Anonymous]

Yes A is right

[Anonymous]

I just got this one wrong…..

In reviewing accounting estimates prepared by management, the auditor should:

I. perform retrospective review of prior-period estimates to determine a possible bias.

II. test assumptions that are not considered sensitive or otherwise significantly affected by judgments.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

[Anonymous]

I just got this one wrong…..

In reviewing accounting estimates prepared by management, the auditor should:

I. perform retrospective review of prior-period estimates to determine a possible bias.

II. test assumptions that are not considered sensitive or otherwise significantly affected by judgments.

A. I only

B. II only

C. Both I and II

D. Neither I nor II

[ahugemistake]

A ?

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

[Anonymous]

Yes. It's A. I chose D.

[Anonymous]

The financial statements of KCP America, a U.S. entity, are prepared for inclusion in the consolidated financial statements of its non-U.S. parent. These financial statements are prepared in conformity with the accounting principles generally accepted in the parent's country and are for use only in that country. How may KCP America's auditor report on these financial statements?

I. A U.S.-style report (unmodified)

II. A U.S.-style report modified to report on the accounting principles of the parent's country

III. The report form of the parent's country

A. I only

B. II only

C. Both I and III

D. Both II and III

[ahugemistake]

Would you happen to have the explanation for the answer?

I picked it because it was the closest thing to “obtaining an understanding” and seemed like a reasonable step. II just didn't make sense to me.

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

[okcpa2015]

Yeah, the wording of part 2 makes the question tricky. Since the assumptions are not sensitive or significant you wouldn't waste your time testing them.

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

[okcpa2015]

@CPA Title keep them coming. Learning some good stuff here.

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

[Anonymous]

This is the explanation for the estimate question: AU-C 240.32 states:

Review accounting estimates for biases and evaluate whether the circumstances producing bias, if any, represent a risk of material misstatement due to fraud. In performing this review, the auditor should…perform a retrospective review of management's judgments and assumptions related to significant accounting estimates reflected in the financial statements of the prior year. Estimates selected for review should include those that are based on highly sensitive assumptions or are otherwise significantly affected by judgments made by management.

[ahugemistake]

Going with B

Won't be surprised if I'm wrong. Haven't reviewed this section yet.

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

[NoraU]

D?

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!!!!!!!!!!!!!!!!!!!!!!

[Anonymous]

Answer: D AU-C 910.12

If financial statements prepared in conformity with accounting principles generally accepted in another country are prepared for use only outside the United States, the auditor may report using either a U.S.-style report modified to report on accounting principles of another country or, if appropriate, the report form of the other country.

[Author]

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