[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

[jgod]

Sat for AUD yesterday. I studied my own way, but used Ninja book, mcq's, and notes to guide me. I feel like I did really well on the MCQ's but was not as well prepared for the Sims. I feel like taking FAR before AUD would have helped.

My suggestions for taking the actual exam is to:
• have good time management,
• stay clam don't panic, and if you panic snap out of it ASAP,
• if you can't get a problem move on, come back to it later (I had to do that 3 or 4 times on some of the sims before I finally got what I had to do)
• be well rested, and,
• take a break at least once to check your nerves, get your energy up, and refocus.

Most of my preparation in the days leading in to the exam were spent getting my head in exam mode. Like an athlete would before a big game. I visualized the exam taking process, I thought of difficulties and feelings that might come up and how to respond to them, I pumped myself up, I created a positive mental attitude, and I focused my mind on the task at hand. There is definitely a mental side to test taking besides the actual material the exam tests. It made a big difference for me.

AUD- 99 (6/8/16)
REG- TBD
FAR- TBD
BEC- TBD

[Theodore]

I have not been able to have a good night sleep these past couple of days because of the exam and work. What's everyone's opinion on taking sleeping pills? lol

FAR: 66, 76!
REG: 76!
AUD: 72, 9/7/2016
BEC: TBA

Don't Stop When You Are Tired, Stop When You Are Done.

[cultur3]

I'm off to face the demon. Good luck to everybody else taking it today!

F 83 4/09/16
A 85 6/10/16
B 81 7/19/16

[Anonymous]

Tell me if I am wrong here:

I felt that both C & D would be correct C for obvious reasons D I feel is an alternative correct answer because the receivables double and the allowance for doubtful accounts stays the same. Why would this line of reasoning be incorrect? As a percentage the allowance of doubtful accounts is decreasing.

Analytical procedures performed during an audit indicate that accounts receivable doubled since the end of the prior year. However, the allowance for doubtful accounts as a percentage of accounts receivable remained about the same. Which of the following client explanations would satisfy the auditor?

a.
A greater percentage of accounts receivable are listed in the “more than 120 days overdue” category than in the prior year.
b.
Internal control activities over the recording of cash receipts have been improved since the end of the prior year.
c.
The client opened a second retail outlet during the current year and its credit sales approximately equaled the older outlet.
d.
The client tightened its credit policy during the current year and sold considerably less merchandise to customers with poor credit ratings.

Explanation
Choice “c” is correct. If a second, similar retail outlet were opened, one would expect sales and accounts receivable to double. As long as the collection rates for the new outlet's receivables were expected to be similar to those of the original outlet, the allowance for doubtful accounts as a percentage of accounts receivable would remain the same.
Choice “a” is incorrect. If more receivables are potentially uncollectible in the current year (as opposed to the prior year), the allowance for doubtful accounts as a percentage of receivables should increase to reflect the greater level of estimated bad debts.
Choice “b” is incorrect. Improved control activities related to the recording of cash receipts might result in a decrease in accounts receivable in the current year as compared to the prior year, not an increase. In addition, improving such controls would not be likely to affect the allowance for doubtful accounts as a percentage of receivables.
Choice “d” is incorrect. If the client sold less merchandise to customers with poor credit ratings, the allowance for doubtful accounts as a percentage of receivables should decrease to reflect the lower level of estimated bad debts.

[marqzho]

CPABen

The client tightened its credit policy during the current year and sold considerably less merchandise to customers with poor credit ratings.

+

accounts receivable doubled since the end of the prior year.

= more good were sold to good customers who pay their bills.

= your estimation for bad debt should be decreases

= you should see on the F/S the allowance for doubtful accounts as a percentage of accounts receivable decreased instead of “remained about the same”

REG 90
FAR 95
AUD 98
BEC 84

[Anonymous]

Hope all who took their exam in the past week did well!

@CPABen: don't know if you caught it in marqzho's explanation. As you already noted in your post, in the answer D scenario, “As a percentage the allowance of doubtful accounts is decreasing.” The question, however, asks for the scenario where “the allowance for doubtful accounts as a percentage of accounts receivable remained about the same.”

[Anonymous]

I understand that if an auditor receives gifts that no insignificant, objectivity may be impaired. I don't understand why the auditor cannot give gifts? Surely this is part of the ‘wooing the client' process?

I ask because of choices A & C in the below question.

Which of the following situations would not impair objectivity, integrity, or independence with respect to an audit client?
a. An auditor provides client management with box seats for the season at a major league baseball franchise.
b. An out-of-town client takes the audit engagement team out to dinner at a renowned local restaurant.
c. A client takes the audit engagement team on a two-day ski trip after the audit team worked for two consecutive weekends.
d. An auditor takes the client's audit committee to Las Vegas for the weekend.
Explanation
Choice “b” is correct. Objectivity, integrity, or independence would not be impaired if a client takes the audit engagement team out to dinner at a renowned local restaurant. Of the choices, this appears to be the most reasonable based on the circumstance, and clearly insignificant to the recipient.
Objectivity or integrity is considered impaired if a member offers or accepts gifts or entertainment to or from a client, unless the gift or entertainment is reasonable in the circumstances. Relevant facts and circumstances would include, but are not limited to:
The nature of the gift or entertainment.
The occasion giving rise to the gift or entertainment.
The cost or value of the gift or entertainment.
Independence would be considered to be impaired if the member's firm or member on the attest engagement or in a position to influence the attest engagement accepts a gift from an attest client, if the value is clearly more than a token gift.
Choice “d” is incorrect. Objectivity, integrity, and independence appear to be impaired if an auditor takes the client's audit committee to Las Vegas for the weekend.
Choice “a” is incorrect. Objectivity, integrity, and independence appear to be impaired if an auditor provides client management with box seats for the season at a major league baseball franchise.
Choice “c” is incorrect. Objectivity, integrity, and independence appear to be impaired if a client takes the audit engagement team on a two-day ski trip after the audit team worked for two consecutive weekends.

[Tipofga80]

And Q3 test takers? How are you preparing for any possible DRS questions?

REG - 77 (will lose in Jan 2016)

BEC - 67 74, 75

AUD - 56, 70, Will try again 🙁

FAR - ??

Save the beast for last.

[marqzho]

bet10

There is nothing to understand but simply remember it. It is a rule.

According to ET 1.285.010.04

Offering gifts or entertainment to an attest client during the period of the professional engagement may create a familiarity threat to a member’s compliance with the “Independence Rule” [1.200.001]. If a covered member offers a gift or entertainment to an attest client that is not reasonable in the circumstances, the threat to the member’s compliance with the “Independence Rule” would not be at an acceptable level and could not be reduced to an acceptable level by the application of safeguards. Accordingly, independence would be impaired.

REG 90
FAR 95
AUD 98
BEC 84

[Anonymous]

@ marqzho,

Amazing scores!!! Would you please shred some lights on how to study AUD more efficiently and effectively

[marqzho]

I did what all the others normally do. Watched all the review lectures and did all the MCQs. I did all Roger IPQ and around 50% of Ninja MCQ. And spent the last two days just reading the textbook page by page. I believe this is a standard procedure to pass the exam. I did nothing less, nothing more 🙂

REG 90
FAR 95
AUD 98
BEC 84

[So FAR So Good]

Hey everyone – just started studying for Audit and I was wondering if anyone could point out the obvious/can't miss sections for this part of the exam. With FAR it seemed like Gov/NFP was overlooked and ended up being very important. What would you say is the equivalent can't miss/easy points section that you should study for Audit?

F - 91 (6/5/2016)
A - 7/30/2016
R - 10/8/2016
B - 12/10/2016

[marqzho]

So FAR So Good

There is none. You won't overlook any topic in AUD since there are just handful of topics. Everyone of them are equally important. (Maybe not that important for IT LOL)

REG 90
FAR 95
AUD 98
BEC 84

[So FAR So Good]

@marqzho – just the answer I was afraid of! haha 🙂

Alright, let's get this show on the road! I'm sure I'll be popping in and out of this thread over the next several weeks.

F - 91 (6/5/2016)
A - 7/30/2016
R - 10/8/2016
B - 12/10/2016

[waffle_house]

We need study group for Q3 already! I'm taking Aud in early July 🙂

[Author]

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