[jeff]

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[Anonymous]

@mariam – C? Equity method valuation should be based percentage of ownership using the equity account balance?

@CPAHOPEFUL – C? I'm sure you cannot delete but I think you can add or change as long as you document the reason, I'm just not sure though if you can do it after document completion date.

[Anonymous]

Right on, it was C and that was the answer to the recent question I just posted.

[mariam almas]

@CPAby2015 the explanation is :” To satisfy the valuation assertion when auditing an investment accounted for by the equity method, an auditor most likely would examine the audited financial statements of the investee company, including performing recalculations of prorata share of income/loss. “

@CPAHOPEFUL11 what is the answer for ur last post ? C ??

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

NH

[Anonymous]

In making risk assessments, the auditor should identify and document the controls that are likely to prevent or detect and correct material misstatements in specific relevant assertions. Controls can either be directly or indirectly related to an assertion in which of the following ways?

Select an answer:

A.

The more indirect the relationship, the less effective that control may be.

B.

The more indirect the relationship, the more effective that control may be.

C.

The more direct the relationship, the higher the overall control risk may be.

D.

The more direct the relationship, the lower the overall control risk may be.

[Anonymous]

Mariam, the answer was C but can you now please explain the revenue cycle? LOL

[mariam almas]

A or C for ur 2nd ???

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

NH

[Anonymous]

@ Future Ninja – Per AU-C 570.18. .18 Nothing in this section precludes an auditor from disclaiming an opinion in cases involving uncertainties. When the auditor disclaims an opinion, the report should not include the going-concern emphasis-of-matter paragraph described in paragraph .15 of this section but, rather, describe the substantive reasons for the auditor's disclaimer of opinion in the auditor's report as required by section 705.4 The auditor should consider the adequacy of disclosure of the uncertainties and their possible effects on the financial statements as described in paragraph .12 of this section even when disclaiming an opinion.

I am not sure exactly in what case that you will issue disclaimer even if the client properly disclosed the going concern issue. I guess it can be compared to a traffic sign “Stop here on red” on a right turn lane. You have to stop but it does not mean you cannot make a right turn after you stop. I don't know if it makes sense and I don't know why I thought of that to compare with. I guess just memorize it. lol.

[mariam almas]

@CPAHOPEFUL11 LOL in which part of it ?

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

NH

[Anonymous]

@CPAHOPEFUL In making risk assessments, the auditor should identify and document the controls that are likely to prevent or detect and correct material misstatements in specific relevant assertions. Controls can either be directly or indirectly related to an assertion in which of the following ways?

Is it B?

[Anonymous]

Mariam, EVERYTHING! LOL

[Anonymous]

The answer was A, I thought it was B as well.

[mariam almas]

@CPAHOPEFUL11 hahah so we need 4-6 hours to explain everything in this cycle, I was working in Gov sector Ministry of Finance (unfortunately left the job yesterday), revenue cycle in Government sector is different from private, that why this chapter was difficult for me.

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

NH

[Anonymous]

Okay, tell me where I am wrong or right here.

First when an sales order comes it gets checked by the credit department, then when approved copies get sent to the shipping and billing department. After that a sales invoice will go to the customer and one to the accounting department. The accounting department will also get the remittance advice WITHOUT the check as the cashier holds on to that. The controller will then do the bank reconciliation. How off am I here?

[mariam almas]

yeah correct, but does the controller the one who prepare the bank reconciliation ?

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

NH

[Anonymous]

Yeah, the controller does the bank reconciliation I believe. The Ninja MCQ has some good simulations on that.

[Author]

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