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August 30, 2014 at 3:34 pm #188295
jeff
KeymasterFree Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/
Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/
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October 24, 2014 at 12:27 am #623586
johnny_debt
MemberHey guys, can someone tell me why the answer is B?
Based on the understanding of how management developed the estimate, the auditor would not use which of the following approaches in evaluating reasonableness?
A. Review subsequent events or transactions
B. Review the process used by management to develop the estimate
C. Review and test the process used by management to develop the estimate
D. Develop an independent expectation of the estimate to corroborate the reasonableness of management's estimate
The auditor won't ‘review the process used by management to develop the estimate', but will ‘review and test the process used by management to develop the estimate'? Am I reading this wrong, or doesn't C also include B?
AUD - 91
BEC - 84
FAR - 91
REG - 91October 24, 2014 at 12:38 am #623587Anonymous
InactiveB would be the first thing the auditor does to understand how the auditor developed the estimates. This question is asking if the estimate is reasonable, and it is indeed confusing.
October 24, 2014 at 12:46 am #623588johnny_debt
MemberYep, the question is asking what the auditor would not do. The answer is B, the auditor would not do B but that implies the auditor will do A,C and D. However C is really two procedures ‘review' and ‘test'. So if the auditor will do C, it is implied the auditor will be doing B which is review.
So if I read the whole answer out loud to myself it would sound like this ‘the auditor will review and test the process used by management to develop the estimate, but will not review the process used by management to develop the estimate.' Which is contradictory.
AUD - 91
BEC - 84
FAR - 91
REG - 91October 24, 2014 at 12:59 am #623589Future Ninja
Participant@johnny this is a tricky question. I found that same mcq while reviewing for aud. A specific clarified standard mentioned three. Geez I forgot what standard was that. However, reviewing only is for Review (SSARS) engagement. Testing Processes in review is not allowed only Inquiry and analytical procedures are allowed. This question is asking for audit engagement. Thus review procedures only is not enough. I hope that helps. ^_^
AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,October 24, 2014 at 2:54 am #623590johnny_debt
Member@Future Ninja, thanks I guess I just have trouble with the logic of the question because if you phrase the whole answer together, we would say a contradictory thing. I'll just move on past this question.
AUD - 91
BEC - 84
FAR - 91
REG - 91October 24, 2014 at 2:59 am #623591johnny_debt
MemberIn parallel simulation, actual client data is reprocessed using an auditor software program. An advantage of using parallel simulation, instead of performing tests of controls without a computer, is that:
A. the test includes all types of transaction errors and exceptions that may be encountered.
B. the client's computer personnel do not know when the data is being tested.
C. there is no risk of creating potentially material errors in the client's data.
D. the size of the sample can be greatly expanded at relatively little additional cost.
When using parallel simulation, actual client data is reprocessed using auditor software program. When a parallel simulation is running, isn't there two copies of the client data? The data that is run on the client's software and the data that is run on the parallel sim. If that is true, there is no risk to creating potentially material errors in the client's data when it is reprocessed in the parallel simulation because the client still retains his set of data. Or am I misunderstanding how a parallel simulation works?
The answer is D by the way.
AUD - 91
BEC - 84
FAR - 91
REG - 91October 24, 2014 at 3:04 am #623592johnny_debt
MemberWhich of the following parties should request inquiry of a client's lawyer?
A.The auditor
B.The stockholders
C.Client management
D.The auditor's attorney
The answer is C, the client management should request inquiry of the client's lawyer. I know that client management sends the inquiry to the lawyer, but I always thought the auditor initiates the request?
AUD - 91
BEC - 84
FAR - 91
REG - 91October 24, 2014 at 1:01 pm #623593jeff
Keymaster(updated – new question posted)
October 24, 2014 at 2:51 pm #623594Anonymous
Inactive@Future Ninja I saw your post asking on the other thread asking how my exam was. I'll just post it here since it will be off topic on the other thread.
My exam was tough. I did 100% of available MCQs in my material but maybe around 15%-20% looks familiar, the rests seemed to test my knowledge on the concept. In my MCQ, there were 3 questions that has the same answer, and there were also questions related to each other, so it's kind of a tip (I hope it really was) and I'm glad they're on the same testlet. The questions on the review materials are already tricky but I think mine has been twisted a little bit more (ie. instead of just saying “large” they worded it as what's considered to be “large”).
The SIMs, I got 1 research, 1 JE, 3 dropdowns, 1 blank fields. I'm confident on my answer for the research. I'm glad I looked at the code carefully because during my review I used to put AU-C so I initially put AU-C but it's actually something else. The JE was simple but you have to know the proper accounting, it's FAR related so I managed to answer it. 2 of the 4 dropdown questions I was able to utilize the AL, 1 I'm 100% sure (word for word) on 1, the other 1 it's in AL but you will still need judgement. The other dropdown question was kind of on my own. The fill in the blank question was unfortunately, my weak area so I just answered based on what make sense to me (hopefully it make sense to AICPA).
I'm remaining positive on my test, well, that's all I can do right now. I hope it will turn out well. 10 more days.
October 24, 2014 at 3:26 pm #623595johnny_debt
Member@CPAby2015, what was your study process like? I'm trying to figure out if I should push my test back by 5 days.
How much time did you leave yourself to do a final review after completing a test bank?
Did you use ninja test bank?
If so, did you complete all the MCQs and the Sims?
I'm trying to gauge if I'm ready for the exam,if I should buy myself an extra week or not.
AUD - 91
BEC - 84
FAR - 91
REG - 91October 24, 2014 at 3:37 pm #623596Anonymous
InactiveYou're good, don't push it back. You will NEVER feel 100% confident going into the exam.
October 24, 2014 at 3:49 pm #623597Sandia
MemberYes, do not push it back!!! you must trust yourself… you can do it!!! I fail for 3 point in Agus and I will take Nov 18.. to much time to overthink over and over….
FAR - 77 x2 Wiley book & no test bank
AUD - 83 x3 NINJA Test bank 3 time
REG - 80 x1 NINJA Test bank
BEC - 78 X2 NINJA Test bank ..done!!promesa cumplida mama -que llege al cielo 🙂
Ethic 100% Licensed VA CPAOctober 24, 2014 at 4:28 pm #623598Anonymous
Inactive@johnny_debt I used Gleim, no other supplement. I strictly followed the review format. I also utilized the study planner and the goal is to finish all topics a week before the exam. I did exam rehearsal the week before which gave me idea on my weak areas and worked on those during the final week of the review.
If you went thru all your materials and understood them then you should be good to go. Just work on your weak areas on the final week of your review and comprehensive test on the final day. Also, make sure you have enough time for SIMs so you'll have time to use the AL. I have 1:45 left when I started SIMs, was able to answer all in 45minutes and spent the remaining hour extracting info from AL and triple checking my answers. I also recommend to skim thru the SIM questions first then start with those you think you know how to answer (I started with the research). Then spin your wheels on the remaining questions, and hope that you'll come up with something.
I agree with CPAHOPEFUL11 & Sandia, you will never know if you're ready for the exam until you actually do it.
October 25, 2014 at 3:30 am #623601willpassby2014
MemberA lawyer's response to an auditor's inquiry concerning litigation, claims, and assessments may be limited to matters that are considered individually or collectively material to the client's financial statements. Which parties should reach an understanding on the limits of materiality for this purpose?
A.
The auditor and the client's management
B.
The client's audit committee and the lawyer
C.
The client's management and the lawyer
D.
The lawyer and the auditor
BEC Passed
FAR Passed
AUD Passed
REG PassedOctober 25, 2014 at 4:08 am #623602johnny_debt
Member@willpassby2014, is it D?
AUD - 91
BEC - 84
FAR - 91
REG - 91 -
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