[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

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[aatoural]

Yeah to be honest all I found was an extra paragraph on A5-36 (e) that ays we can express a disclaimer if management's report states that they believe the cost of correcting a weakness would exceed the benefits to be derived from implementing new policies and procedures.

Which makes me more confused, because it makes sense what you say that issues fall more under GAAP category.

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

[HoosierCPA]

On becker exam #2. They have a question related to this (I got it wrong):

In an engagement related to a non-issuer, an auditor discovers several significant deficiencies in internal control, one of which is deemed to be a material weakness. Which of the following is true?

A. If IC's was evaluated as part of a separate engagement to examine IC, only material weakness needs to be communicated to those charged with governance.

B. If IC was evaluated as part of an audit, the auditor must restrict use of the report on IC — CORRECT

C. If IC was evaluated as part of a separate engagement to examine IC, the auditor must restrict use of the report on IC

D. If IC was evaluated as part of an audit, the material weakness needs to be communicated to those charged with governance.

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

[aatoural]

I have no words for that question 🙁

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

[aatoural]

I have done this question at least 6 times and non of the time I have gotten it right. Can somebody explain each option. I don't even understand it enough to analyze it.

To gain assurance that all inventory items in a client's inventory listing schedule are valid, an auditor most likely would trace:
a.Inventory tags noted during the auditor's observation to items listed in receiving reports and
vendors' invoices.
b.Items listed in receiving reports and vendors' invoices to the inventory-listing schedule.
c.Items listed in the inventory-listing schedule to inventory tags and the auditor's recorded count
sheets.
d.Inventory tags noted during the auditor's observation to items listed in the inventory-listing
schedule.

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

[aatoural]

I cannot get my hands around transaction cycles and exam is on Monday. I don't know what else to do about it.

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

[sancasuki]

Is it C?

[aatoural]

Sorry – no is D 🙁

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

[Larry]

I think it's C as well.

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

[aatoural]

Sorry, it is C, I put what I had answered. Why is it C?

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

[HoosierCPA]

haha I was typing this big explanation as to why I thought it was C! Sounds like an existence question–which C would more explain existence then D. D seems more like a completeness explanation.

I'm actually respectable at transaction cycles (I got around 75% first time through the homework without using the book). Wish I could help you with this one.

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

[Larry]

What gives? Transaction cycles sure does suck!

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

[Larry]

I was about to give up lol. As he was saying, the question is asking if the inventory listing schedule is valid as if it exist. So you would go from inventory listing to the inventory tag (inventory item) and compare to the recorded count.

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

[aatoural]

Thanks guys I hope my transaction cycle questions in the exam are resumed to confirmations and revenue cycle..hahaha a lot to ask

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

[HoosierCPA]

Every time I handle transaction cycles dealing with Assets or Liabilities I visualize the lecture Gearty gives where Assets will more then likely be over stated so you Vouch down (I even visualize the V in vouch being the arrow pointing down lol) and Liabilities tend to be understated.

More times then not if you see assets or revenue always think existence assertion and liabilities and expense completeness assertion.

Existence — Go from the financials to the source

Completeness — From the source to the financials

Financials — Reports (AR, AP, Shipping, Receiving), Listings (Inventory)
Source — Invoice, BOL, Observation, Tags

Off the top of my head those are common terms used to describe the “Financial” and “Source”, I'm sure there's more terms that you will see.

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

[HoosierCPA]

Well I think I'm done for awhile. 8.5 hours calls for a break! Longest day I've put in awhile. Hopefully it pays off.

I'm sure you guys will here from me again tonight. @aatoural thanks for all the help!

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

[Author]

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