[jeff]

Free 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/

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

[Future Ninja]

before commencing the audit engagement, we should conduct “RIOT” to obtain knowledge relating to client's business.

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

R = review of Financial History

I = Inquiry

O= Obtain understanding of client accounting

T= tour the client facilities.

RIOT:

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Future Ninja]

An internal auditor's work will affect the NET of an independent auditor's auditing proc when the IA's work relates to assertions about the:

a. existence of fixed assets additions

b. valuation of RP transactions

c. existence of contingencies

d. valuation of intangible assets

Why the answer is A? Becker's explanation is it's because B,C and D involves more subjective and be performed by the auditor.

please enlighten me. thank you.

AUD - 79 (expired) retaking July 28,2016
FAR - 76 expiring July 31, 2016
BEC - 85
REG - 74,74,74,74,59,70,

[Anonymous]

Um, what section is that from, evidence? I remember coming across that question.

[Guti]

I have a quick question for all the individuals who are using Roger CPA for Audit. Im on chapter 2 right now, and since Roger's MC questions are too easy, Im also using Wiley. The problem is that a lot of question on WTC are from material that Roger did not covered on his lectures or book. I thought Roger's lectures covered most of the material from WTB since they used to work together. What are you guys doing when you come across this problem? Should we ignored the questions he does not cover, and worry about the stuff he teaches? Im afraid that I might get a lot of questions on the stuff he does not cover when the exam comes about.

FAR-84
AUD-
REG-
BEC-

[RandomAlt]

@Future Ninja

Coincidentally, I studied the Internal Auditor section today, and had a very similar question.

As CPAexcel explained it, contingencies and valuation are HIGHLY JUDGEMENT BASED. As the external auditor, the audit report must reflect your judgement. You cannot rely on the judgement of an Internal Auditor, although in some circumstances you can use their work, or supervisor work they perform for you).

On the other hand, the existence of fixed asset additions is not very subjective. Either the fixed assets are there, or they are not. It would be easier to verify that work performed by an internal auditor.

Remember, the point is that as the external auditor, the client is relying on your judgement, not that of an internal auditor. The buck stops with you (in the report). If an error is later found, and a valuation is off by a large percent, you can't go back and day “but that is what the internal auditor thought was correct”

Does that make sense?

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[Anonymous]

Green, CPA, is aware that Green’s name is to be included in the interim report of National Company, a publicly held entity. National’s quarterly financial statements are contained in the interim report. Green has not audited or reviewed these interim financial statements. Green should request that Green’s name not be included in the communication. The financial statements be marked as unaudited, with a notation that no opinion is expressed on them.

A. Either I or II.

B. Both I and II.

C. I only.

D. II only.

[RandomAlt]

@ahugemistake & CopyPasteMonkey

Hey fellow CPAexcel users…how is the studying going.

I, unfortunately, am way behind. Between 9/15 and my son having surgey earlier this week I am way behind in my exam planner.

I just finished the Internal Control – Concepts and Standards section, and my exam planner is saying I should be in Audit Evidence – Specific Audit Areas.

Since you guys are farther along than I am, can you give me some guidance on which sections you feel need emphasis, and which don't.

@CopyPasteMonkey … you weren't kidding about the dry material

FAR - [10/07/2013 --> 66] [07/07/2014 --> 86]
BEC - [08/31/2014 --> 86]
AUD - [11/24/2014 --> 88]
REG - [02/14/2015 --> 92]

[jsim85]

Hi all, it's crunch time! One more week until the big rematch…

Quick question on a SIM question I came across: “London Company has material investments in stocks of subsidiary companies. Stocks of the subsidiary companies are not actively traded in the market, and the CPA firm's engagement does not extend to any subsidiary company. The CPA firm is able to determine that all investments are carried at original cost, and the auditors have no reason to suspect that the amounts are not stated fairly.”

Had to identify what type of opinion was appropriate in the circumstance. I thought it would be an unmodified opinion. The answer is “either qualified or disclaimer”. Is it because auditors are required to audit material subsidiaries?

AUD - 68, 85
FAR - 75
BEC - 74, 76
REG - 80

[Anonymous]

@jsim I think because the auditor has no way of verifying the investment market value which is considered scope limitation. Engagement does not extend to the subsidiary company and it is not traded in the market. Scope limitation may lead to qualified or disclaimer. Material misstatement is either qualified or adverse.

[Anonymous]

CPAby2015, was the answer A?

[mariam almas]

@CPAby2015 ummmm A or B ?

AUD: 81 (Done)
REG: Currently studying
FAR: TBD
BEC: TBD

NH

[Anonymous]

A

[Iggy1985]

I may just be tired, but this question has me confuzzled.. if the numerator and denominator decrease by equal amounts, won't the ratio be the same?

Auditors sometimes use comparison of ratios as audit evidence. For example, an unexplained decrease in the ratio of gross profit to sales may suggest which of the following possibilities?

Unrecorded purchases.

Unrecorded sales.

Merchandise purchases being charged to selling and general expense.

Fictitious sales.

Unrecorded sales.: This answer is correct because unrecorded sales would decrease both sales and gross profit by equal amounts and thus decrease the ratio. Note that the ratio is less than 1.0.

FAR - 89 (8/19/14) Wiley TB, Wiley Book, Books from School, Ninja Audio/Notes
AUD - 92 (10/14/14) Wiley TB, Wiley Book, Ninja Audio
BEC - 82 (5/8/15) Mostly Ninja MCQ, sprinkles of Becker lectures and Ninja Audio
REG - (8/14/15)

[Anonymous]

@Iggy1985 If the ratio is less than 1, equal amount of decrease in both numerator and denominator will decrease the ratio and equal amount of increase will increase the ratio. For example, the correct sales should be $100 sales at $50 gross margin that is $50/$100=50%, however a sale of $10 was not recorded therefore the margin per record will be $40/$90=44.44% which is lower than 50%.

The question you posted can be answered without any calculation. It is asking for possible reason of decrease in GP which is either understatement of sales or overstatement of cost of sales. D is overstatement of sale so definitely wrong, unrecorded purchases will understate the cost of sales so A and C are also wrong, which leaves you answer A.

[Author]

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