[jeff]

Welcome to the Q2 2016 CPA Exam Study Group for AUD.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

[EuroAddict]

@dhums

the aud SIMS def took me longer than FAR. Probably about 25 min during the test to find the answer.

-----------------------------
BEC - 77, 03/2015 (first try)
FAR - 79, 05/2015 (second try)
REG - 83, 12/2015 (first try)
AUD - 84, 03/2015 (first try)

I got 99 problems but the CPA ain't one.

[gigabyte2001]

I'm not in public practice so my AUD (first try, first CPA exam test) is scheduled for 4/16. I keep hoping that 10 yrs in corporate practice + 5 yrs before as a staff accountant mostly focused on tax + CMA license = not going to fail.

I'm using Gleim mainly because I used it for the CMA & passed both parts on the first try. On the other hand, I only passed by 10 pts on one and 20 pts on the other. I think AUD will be my weakest subject as it's the one I have the least experience with.

At this point, I'm starting to get nervous. I'm in Chapter 17 of Gleim, the material has been getting more nuanced/difficult and my average scores are declining. I've got myself set up to finish all the Gleim chapters two weeks ahead of the test so I have that time for final review, even though Gleim recommends 1 week for final review.

I'm interested in others experience with Gleim/AUD and any words of wisdom, tips, tricks, hints, soothing thoughts, and adult beverages.

B - 11/11/16
A - 4/16/16 87!!
R - 2/17/17
F - 7/26/16 - Waiting for 8/23

[Anonymous]

In chap 3 of Becker, under the subtitle of ESTABLISH THE PRESENCE OF THE PRECONDITIONS FOR AN AUDIT, it says “if the preconditions for an audit are not present, the auditor should not accept the proposed engagement UNLESS REQUIRED BY LAW OR REGULATION”

That makes sense. However on the next page under management-imposed scope limitation it says the “auditor is permitted, BUT NOT REQUIRED, to accept the engagement”

Doesn't that contradict the first statement of being required?

[jolien]

Hi,

I'm using Ninja MCQ for AUD. There is a question in there that I still don't get the answer. Can you guys help me understand it a bit more?

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

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

B. Deviations from specific internal control procedures at a given rate ordinarily result in misstatements at a lower rate.

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

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

Correct answer is “B”, and explanation is below:

Two types of sampling risk that affect performing tests of controls are:

The risk of assessing control risk too low
The risk of assessing control risk too high

If the auditor assesses control risk too high, which would occur if there are deviations from an internal control procedure in the sample, additional substantive procedures would normally be applied and oftentimes results in the true operating effectiveness of the control at a lower rate.

I've read the explanation over and over, but still don't get it. Any help is appreciated.

[FAR_WARS]

thanks for the support everyone. I feel I let you all down!

@Dmb2stepper: For my 72, I did “comparable” on my MCQs, but got some very nasty sims.

@pyacpa49:

I believe this is the correct AL for reviews.

nonissuer, historical stmts:
SSARS (AR)

nonissuer, Interim stmts:
SAS (AU)

Issuer, historical or interim stmts:
PCAOB

FAR- 80
BEC- 75
AUD- 78
REG- ?

[FAR_WARS]

In Becker, there is a box talking about when an Emphasis of Matter paragraph is necessary.

-Going Concern
-Consistency
-Changing Prior Opinion
-Special Purpose Frameworks.

Anyone have a similar list for when an Other Matter paragraph is necessary?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[pyacpa49]

@Dmb2stepper I think this depends on the severity of the scope limitation. For example, if management limits one way for an auditor to determine the beginning balance of inventory lets say, will the auditor be able to perform other tests to determine this value? Is the amount of inventory material to the financial statements? If they can perform other tests or if the amount is immaterial, and a potential difference here will not cause the F/S to be material misstated, then they can accept the engagement. However, they are not required to accept unless a law or regulation mandates them to do so.

I'm not certain on this so definitely don't take what I say as the absolute truth, but it makes sense in my mind.

[FAR_WARS]

@Dmb2stepper, pyacpa49:

is “no scope limits” a required precondition?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[pyacpa49]

@Dmb2stepper, FAR_WARS

I believe it is only a consideration if it would cause the auditor to disclaim an opinion. Which is why I said it depends on severity of the scope limitation.

@FAR_WARS

Wiley says Other Matter paragraphs are used when the matter is:
-Relevant to users understanding of the audit
-Relevant to the users' understanding of the auditor's responsibilities or the auditor's report.

Not as specific, but that's all it gives really.

[FAR_WARS]

@jolien:

Lets take a sample of 10 gumballs and inspect 0 of them. Our deviation from this internal control procedure is 100%.

Should we say that 100% of the gumballs in our machine are defective just because we did not properly inspect our sample?

No, the actual % of defective gumballs in our machine will be lower than 100%.

here is how Wiley explains it:

Answer (b) is correct because while deviations from pertinent control procedures increase the risk of material misstatements, any specific deviation need not necessarily result in a misstatement. For example, a recorded disbursement that does not show evidence of required approval might nevertheless be a transaction that is properly authorized and recorded (AICPA Audit Sampling Guide)

FAR- 80
BEC- 75
AUD- 78
REG- ?

[FAR_WARS]

Which of the following is not true regarding an engagement to provide a written report on the application of the
requirements of an applicable financial reporting framework?

a. The reporting accountant's written report on the application of the requirements of the application of the applicable financial reporting framework should include a paragraph restricting the use of the report.

b. A reporting accountant is prohibited from providing a report on the application of the requirements of an applicable financial reporting framework to a proposed future transaction involving the facts and circumstances of a specific entity.

c. A reporting accountant is prohibited from providing a report on the application of the requirements of an applicable financial reporting framework to a transaction not involving the facts and circumstances of a specific entity.

d. The reporting accountant's written report on the application of the requirements of an applicable financial reporting framework should include an identification of the specific entity method.

Answer is b. However when I look at my example report “special purpose framework, Cash Basis”, I can not find a paragraph that restricts use. (as this question claims if option “a” is true).

Is a special purpose framework the same as an applicable financial reporting framework?

EDIT: I think the report I should have been looking at was, “Separate report on Compliance”, which indeed does include a paragraph that restricts use. Any thoughts?

FAR- 80
BEC- 75
AUD- 78
REG- ?

[FAR_WARS]

@pyacpa49:

also:

For additional supplementary information required by the FASB, the auditor should apply certain limited procedures to the information and add an other-matter paragraph to the financial statement audit report.

and:

If management (of a governmental body) declines to present information required by the GASB, the auditor should issue an unmodified opinion with an other-matter paragraph.

FAR- 80
BEC- 75
AUD- 78
REG- ?

[pyacpa49]

Anyone got any nifty ways to remember when to give which type of opinion. For example, if there is a scope limitation the two types of possible modified opinions are qualified and disclaimer of opinion. I'm trying to find a way to know how to choose between the two.

From what I have read the differentiating factor is whether or not the scope limitation is pervasive. But, unless a question explicitly states that it is pervasive, how do we choose between the two? It seems to me this is something that would come from experience with the particular client, which is something that we do not have for the test.

My inclination is to give the more conservative opinion (or disclaimer) but from the number of questions I seem to get wrong when choosing between these two choices I'm approaching this wrong.

I could probably look this up online or in past posts, but this thread is pretty dead so I thought I would try to liven it up. Thanks, all.

[Wanna_B_TXCPA2014]

@pyacpa49- I think about the opinions in terms of this disclaimer is always when you don't have all in the information so you are unable to make a decision. Adverse is really wrong, like they completely jacked this up keep your money in your pocket. Modified is wrong but not to the point this is going to cause you to lose a ton of money but don't say I didnt warn you.

Hope this helps

[FAR_WARS]

I believe “qualified = material” and “disclaimer = material & pervasive” are the key terms. Can you post the question that was troubling you?

Also something tricky I have come across is that a modified report and a modified opinion are not the same thing. ie you can modify the report by including an emo or om paragraph. However, the opinion is still unmodified…

FAR- 80
BEC- 75
AUD- 78
REG- ?

[Author]

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