[jeff]

Welcome to the Q3 2016 CPA Exam Study Group for AUD.

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

[HoosierCPA]

So basically to save everyone the time looking it up, A4 pg 46 just says pensions are a payroll function that require disclosure and should be included in the notes of the financial statements.

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[Larry]

I was going to say the same thing about natural disaster. Maybe that is the trick. If there was no disaster, then perhaps it would require an adjustment?

REG - 82
FAR - 78
BEC - 76
AUD - 8/27/16

[aatoural]

@papogator – thank you!

@dtatham10 – So I guess from there we should think how to test each management assertion? not very helpful on Becker's side

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[patelhj1]

@mckan514w Going to give this my best shot trying to explain this. So you only make adjustment to F/S if the event occurred before and should have been recored before year-end.

Question 1
Which of the following items would most likely require an adjustment to the financial statements for the year ended December 31, Year 1?

A. Uninsured loss of inventories purchased in Year 1 as a result of a flood in Year 2 — Happened after year-end date.
B. Settlement of litigation in Year 2 over an event that occurred in Year 2 — After Year-end date
C. Loss on an uncollectible trade receivable recorded in Year 1 from a customer that declared bankruptcy in Year 2– CORRECT ANSWER should have been recored in year 1, need to abjust
D.Proceeds from a capital stock issuance in Year 2 that was being approved by the board of directors in Year 1- happened after year-end

Question 2
Zero Corp. suffered a loss that would have a material effect on its financial statements on an uncollectible trade account receivable due to a customer’s bankruptcy. This occurred suddenly due to a natural disaster 10 days after Zero’s balance sheet date, but one month before the issuance of the financial statements and the auditor’s report. Under these circumstances:
I the financial statements should be adjusted.
II the event requires financial statement disclosure, but no adjustment.
III the auditor’s report should be modified for a lack of consistency.
A.I only
B. Both I and III
C. Both II and III
D.II only- CORRECT ANSWER Happened after year-end date and disclosure is required because management is aware and this “material”

Hope this helps. I will try to reference you in the book where it is if I come across it.

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[mckan514w]

Thanks @allaboard and @papogator – I suppose that may make sense– or at least as much sense as any of these other questions and explanations– amazing how each section finds a new way to make you feel like you are a complete idiot- this one I keep thinking how can I answer correctly when I don't even understand what they are asking…

@dtatham10 thanks for posting that statement.

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[mckan514w]

@patelhj1- thanks for the help– so what you are saying is that in question 1 when they declared bankruptcy in year 2 management should have known in year 1 that they receivable was going to be uncollectible so it needs to be adjusted?

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[patelhj1]

The receivable is for a collection in year 1 and that the management needs to go back and adjust the year 1 F/S. Even though the company declared bankruptcy in year 2 the receivable is for goods on year 1 F/S.

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[mckan514w]

okay got ya… thanks!

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[patelhj1]

Its in either A5 or A6 If I come across it I'll post

Also it feel like it helps to have passed the other sections. This was in FAR somewhere in great detail.

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[Larry]

patel, for question 2, what would the situation have to be that would require an adjustment to the F/S?

REG - 82
FAR - 78
BEC - 76
AUD - 8/27/16

[samer]

Whats the reporting model for PCAOB engagements?

For example does the title change?

[patelhj1]

@papogator anything management should of known about, litigation, bankruptcy, write-offs. If the event occurred in year 1 then most likely you will need to go back and adjust the F/S

BEC 78 08/2015
REG 71 11/2015, RETAKE 83 01/2016
FAR 75! 5/2016
AUD ? 8/2016

Becker with Nonstop NINJA MCQ
Google most difficult professional exam

[Zyx]

aatoural, I don't use becker but thanks for your help anyway!

mckan514w & patelhj1; Just additional to your explianations..
1st question is the result of a customer's deteriorating financial condition
leading to bankruptcy subsequent to the balance-sheet date would be indicative of conditions existing at the balance-sheet date.
2nd question is the result of a customer's major casualty such as a fire or flood subsequent to the balance-sheet date would not be indicative of conditions existing at the balance-sheet date and adjustment of the financial statements would not be appropriate.

https://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-00560.pdf

REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27

[Larry]

zyx11…Thanks!! So because of the natural disaster, “major casualty” it would require a disclosure and not an adjustment.

REG - 82
FAR - 78
BEC - 76
AUD - 8/27/16

[Zyx]

Papogator24, based on AICPA so yes. Subsequent events is covered in FAR as well (I am retaking it after AUD).

I need help with this question;
Which of the following best identifies the effect of an increase in the risk of material misstatement on detection risk and the extent of substantive procedures?
A.The acceptable level of detection risk decreases, and the extent of substantive procedures increases.
B.The acceptable level of detection risk increases, and the extent of substantive procedures increases.
C.The acceptable level of detection risk decreases, and the extent of substantive procedures decreases.
D.The acceptable level of detection risk increases, and the extent of substantive procedures decreases.

A. is correct. Isn't assessed high detection risk resulted in decreases in substantive test because the auditor is more willing to accept high risk?? My exam is coming in 2 days and I feel like everything I know is wrong!

REG: 77 x2
BEC: 81 x3
FAR: 68 retake 10/1
AUD: 8/27

[Author]

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