[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

[Anonymous]

@lblacker – i would also add that usually in fraudulent FS reporting, the company is either overstating income/assets or understating liabilities/expense (unless it's a tax driven company, but i think we're supposed to assume this is NOT the case unless the question says differently.)

I suppose the question isn't saying if Promotions, compensation, or other rewards are higher or lower than expected, but I naturally assume it's higher – which then I agree with what @dtatham10 said. IF they were lower than expected then you could be dealing with fraudulent reporting and the company trying to make their situation look better than what it actually is.

[Larry]

Yeah allaboard, it's ninja.

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

[Larry]

Everyone, my mistake. I typed the incorrect letter. The correct answer is B. Oops 🙂

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

[HoosierCPA]

@allaboard I apologize here is the full MCQ, it's in A5, audit sampling (Question CPA-02611)

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

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

B. In determining tolerable rate, an autiro considers detection risk and the sample size.

C. Deviations from specific control activities at a given rate ordinarily result in misstatements at a lower rate — CORRECT

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

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

[Anonymous]

Becker has me super confused about contingent fees. I keep getting MCQ's where the answer is something along the lines of “contingent fees impair the auditor's independence” or “contingent fees are expressly prohibited,” but then I'll get a question where the answer is that the auditor can accept contingent fees for representing a client in an IRS audit or for seeking a private letter ruling. Is there some subtle wording difference that I'm missing here? Why are they “expressly prohibited” in some questions but okay in others?

[HoosierCPA]

@allison you are on the right track. General rule is they are not allowed. The exception to the rule is contingent fees ARE allowed if they are fixed by courts or other judicial proceedings.

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

[aatoural]

Does anybody that has Becker understand the table on A5 – 17? Factors influencing sample sizes for tests of details. There are 5 questions from the HW on A5 – Audit sampling related to that that asks for comparision between case 1 and 2 which I just do not understand.

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

[HoosierCPA]

@aatoural I have been working on A5 as well.

For the questions with comparison between 1 and 2. I look at them from a common sense perspective. If population 2 relative to 1 is larger you would want to test more to have more assurance. Variability same deal–if an account has more variability (more unpredictability) you would need to test more. Tolerable risk is the risk that the auditor is willing to assume, Higher tolerable risk means they are ok with a few more errors, in that case they are willing to do less testing. The one that always tripped me up was the last one “specified risk of incorrect acceptance”. This one I was having a hard time wrapping my head around. Basically its saying if the specified risk is high that means you have a higher risk of saying something is OK when in fact it is not. Because of this higher risk you can assume it was a result of doing LESS testing. Higher risk = Less sampling. Conversely if you have a lower risk relative to population 1 for your specified risk of incorrect assessment that means you are less likely to incorrectly make an assumption off your sample size. Less likely to make an incorrect assessment you can assume is becuase you are doing MORE testing..more sampling = lower risk.

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

[HoosierCPA]

Got another one, trying to tie up some loose ends!

An auditor may decide to decrease the acceptable level of risk when:

A. The cost and effort of selecting additional sample items is low — CORRECT

B. Many difference (audit value minus recorded value) are expected

C. Initial sample results do no support the planned level of control risk

D. Increased reliability from the sample is desired

I chose D, however I can see why A was the correct answer. However, their explanation on why D is incorrect has me confused.

Becker's explanation: “Decreasing the acceptable level of risk doesn't increase the reliability of a given sample. It does, however, result in selection of a larger sample which in turn makes it less likely that the auditor will make an incorrect decision” — isn't that a half a** way of saying that its more reliable! lol?

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

[aatoural]

@dtatham10 – Thanks much better your explanations

Yeah, it does, but look at it this way, just by you decerasing the amount of risk you are willing to accept from selecting certain sampling size, does not guarantees that you are gonna have a more reliable selection. Like they say “less likely”, not guarantee thu.

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

[HoosierCPA]

@aatoural that helps! Thank you!

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

[.]

Oh god. The sims were so weird. I changed my answers so many times. Didn't do that on FAR or REG. Some of the drop down ones didn't make sense. The question was clear but the choices were poorly written. Did not have to memorize ratios at all. They give you all the ratios on another tab. I didn't get a DRS. So this morning's last ditch effort on the 5 DRS that Wiley Testbank has (CPAExcel/Ninja don't have any) was a waste of time. And the 3X5 cards of ratios I practiced on the train ride to Prometric.

Didn't get a DRS on FAR or REG either. Only one that was similar (lots of exhibits) to a DRS on FAR but not a real DRS. Of course, I left that one for last, ran out of time, and left it completely blank. This time I had plenty of time.

FAR - June 2016 - 88
REG - July 2016 - 89
AUD - Aug 2016 - review phase currently
BEC - Sep 2016 -

Wiley CPA Excel & Ninja MCQ

[aatoural]

Good Luck circadian hope it went well! 🙂

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

[Larry]

Well, I hope you passed Circadian. I'm sure you did fine. Be careful with the exam disclosure mentioning what they gave you.

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

[.]

Ooopsie. I thought I was being careful.

FAR - June 2016 - 88
REG - July 2016 - 89
AUD - Aug 2016 - review phase currently
BEC - Sep 2016 -

Wiley CPA Excel & Ninja MCQ

[Author]

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