[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

[Larry]

REG SIMS are hell. Becker book for REG is great. Make sure you know B-law good as they are easy points. I remember Peter Olinto say get the easy points from B-law. The tax chapters aren't that bad (probably because I do taxes on the side).

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

[Theodore]

I honestly thought I was going to fail REG since I took it twice in college and didn't pass it. I prioritized the good life lol. What I've learned with these exams is that everything is possible as long as you discipline yourself and stay committed through out the process.

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

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

[needtopass]

Hi all, I've been study for AUD for a long time! long time! long time! I use Roger as my review course.
Recently I bought the Ninja MCQ for AUD. and there were two questions that come to my attention. They are the same questions on both the Ninja and Roger, but with different answers. so I am confused and need some help.

1. Which of the following events occurring in the year under audit would most likely indicate that internal controls utilized in previous years may be inadequate in the year under audit?
A.The entity announced that the internal audit function would be eliminated after the balance sheet date.
B.The audit committee chairperson unexpectedly resigned during the year under audit.
C.The chief financial officer waived approvals on all checks to one vendor to expedite payment.
D.The frequency of accounts payable check runs was changed from biweekly to weekly.

On Ninja the answer is C. Roger answer is B.

2.An auditor discovered that a client's accounts receivable turnover is substantially lower for the current year than for the prior year. This may indicate that:
A.fictitious credit sales have been recorded during the year.
B.employees have stolen inventory just before the year-end.
C.the client recently tightened its credit-granting policies.
D.an employee has been lapping receivables in both years.

Ninja answer is A. Roger answer is D.

[aatoural]

Thanks for the heads up guys!! 🙂

Needtopass – I remeber from Becker the explanation went to C as the correct answer. However, I don't know why Roger picked B, I would never had picked B thu.

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

[HoosierCPA]

@aatoural my schedule has changed a bit since we last talked. I will be sitting Oct 20th for Aud and Dec 10th for REG so we will have less overlap then originally thought. Having gone through REG many times I might still be able to help you out with a questions. For the most part its memorization– there is no one single concept thats hard to grasp. Alternative Minimum tax took me the longest to understand and I spent a ton of time on it (still have yet to be examined on it…so time well spent haha!)

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

[needtopass]

@aatoural-Thanks! The explanation on Roger is: the unexpected resignation of the audit committee chairperson may be indicative of a conflict within the audit committee, which may indicate a change from the previous period. At first, I remembered I pick C too… Thank you for your help!

[HoosierCPA]

@needtopass I remember this exact question being brought up weeks ago when I reviewed. I argued management override (choice C) is an inherent risk in all control environments and is not indicative of inadequate controls. I still feel the same way however I cannot tell you for sure which one is actually correct since B doesn't sound like a great answer to me either.

My argument against C is you can have the best controls in place and you can follow them but if one day your CEO walks up to you and tells you to force a payment through even though the proper approvals haven't been made you will do it regardless of controls. There are areas of becker that specifically discuss this. Having said that if an external auditor sees this is happening they may assess inherent risk to be higher which would result in lowering detection risk which results in increased auditor testing.

Hopefully this makes a little sense. I can't give you a great reason for B — maybe they think without the audit committee chairperson that controls may not be followed which would result in weaker internal controls or no controls at all. Your guess is as good as mine.

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

[Anonymous]

@needtopass I agree with @dtatham10 on the first one. C would be an inherent limitation that exists no matter how effective controls are. I think B could raise questions/concerns regarding the status of IC if the chairperson unexpectedly resigns – what happened? why are they leaving? do they know something about IC that nobody else knows? are they jumping from a sinking ship?

on #2 – I'm slightly happy to see this. I ran into this question in Ninja and answered D. Ninja said nope, so I brought to this group and I think everyone decided that yes, overlapping would/could have an impact on the AR turnover – but the fictitious sales would have a larger/more obvious impact so it's the better answer.

[HoosierCPA]

For part 2.

Fictitiously putting in credit sales would cause your sales and your AR to go up by the exact same $$. Since typically your sales will always be higher then your AR you can assume that this will cause your AR Turnover to lower.

Lets put #'s to it. 100k in sales 20k AR…before your fictitious sale you are at an AR T.O. of 5 (100/20)
Lets say you have a fictitious credit sales of 5k. That brings Sales to 105k and AR to 25k and your AR T.O. to 4.2 (105/25). So yeah it does lower your AR T.O. now does it SUBSTANTIALLY lower it? I feel like that's subjective.

Lapping is a little harder for me to grasp my head around I can't give you a great example for that. The extent of what I know is its a fraud scheme where you apply payments to AR that the payments aren't actually for. I'm not sure it would cause a drastic change in AR since essentially there is always 1 AR account not applied correctly at any given time. (I know that was a terrible explanation of lapping haha)

Having said ALL of that I would have chosen A

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

[needtopass]

dtatham10-Thanks, it is always nice to see what others think about the question.Thanks for your explanation, that helped a lot!

allaboard-Thank you for your explanation! I am glad to see someone else has the same question as me, prove that I am not alone out there.

and good luck to you all! Let's get this AUD down!!!!

[Just_Trying_To_Pass]

So the last 4 days I have tried to plow through Audit 1 and 2 for Becker. Audit Reports, Other Reports, Reviews, Compilations, Preparations etc. I was starting to feel so discouraged because I watched the lectures, read the book, did the hw and still didn't know what the hell I was answering on the questions. NOTHING was clicking and I felt that I forgot every single thing about an audit. Today I spent a few hours just going thread-by-thread of the Audit Study section. (I have available time at work for the next 2 weeks). This was so helpful for me and I actually found some great material. I kind of took a step back and reviewed a lot of basic concepts of audit that I think I was missing before hand (it's been about 2 years since I took my audit class in college). Although the material I found didn't relate specifically to Audit 1 and 2, I felt as though because I took a step back reviewing basic concepts and really looked in depth as to what management's responsibilities, the auditor's responsibilities etc. I now understand an Audit Report SO much better. “MilesCPAReview” on youtube was one thing I found in particular that was incredibly refreshing. I watched this video: https://www.youtube.com/watch?v=IQC79geH5Co&list=PLt1gLHu4m-jjY46IIRbASBgc2ORwoBUTN&index=1 (He has a heavy accent that you get use to, but just the enthusiasm this guy has when teaching is amazing. I was so much more engaged opposed to listening to Tim Gearty) I believe I would get so much more out of Becker self-study lectures if they were set up this way, where you can see the lecturer writing on a white-board and video is flipping back an forth from highlighting the book material and constantly referring back to the mnemonics and “big picture” written on the white-board. Maybe it just took some time refreshing myself on the “Audit language”, but I now feel a lot more confident about my auditing abilities. Lesson learned = don't ever get stuck on one set of CPA material. If something on Becker isn't clicking don't be afraid to search some youtube videos and “random” threads of questions others have had in the past. I also think Becker teaches audit out of order, but that is probably because of my “Ah-hah” moment.

BEC: 70, 83
REG: 8/13/16
FAR:
AUD:

[Anonymous]

found it! and here I thought prior quarter study groups were lost forever.

@dab @mckan514w @rosy0407 @samer good luck!!!

[mckan514w]

Thank you @allaboard! Not feeling hopeful but with these exams one never knows right? Good luck! to you as well as @dab @rosy0407 @samer good luck!!! Here's hoping we don't meet in here again!!!

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

[jeff]

I am going to close this to avoid 2 study group threads … it can always be found in the “___ Review” area, however.

[Author]

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