[jeff]

Welcome to the Q4 2016 CPA Exam Study Group for AUD.

If this is your first post in the study group – please post your target exam date (just the time frame to preserve your anonymity), and your past history with this exam (optional, of course).

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

[Anonymous]

@Dtatham, where's that question from? NINJA or Becker? And under what Chapter/topic is that?

[pharaoh]

@dtatham10 – Yes. I used to get confused about it too until I learned the trick which is “if the financials have been audited”

If audited – positive opinion
Not audited – NEGATIVE assurance, that's why answer A is wrong because it said audited

FAR 8/2016
AUD 1/2017
REG TBD
BEC TBD

[HoosierCPA]

Awesome! Thanks Pharaoh!

Got another one fore everyone:

An auditor is performing substantive tests of pricing and extensions of perpetual inventory balances consisting of a large number of items. Past experience indicated numerous pricing and extension errors. Which of the following statistical sampling approaches is most appropriate?

A. Unstratified mean-per-unit

B.Probability-proportional-to-size

C.Stop-or-go

D.Ratio estimation — CORRECT

In my notes (I assume I pulled it off a becker question somewhere) I have ratio estimation (my notes actually say ratio sampling, so not sure if thats where the difference is) is best used when audited amounts are close to book amounts. Using that logic it would not make sense to choose D.

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

[Double-entry Deviant]

@dtatham10 – I would assume ratio estimation since it is used for a large number of items – as per the question.

Also – think of the actual answer – using ratios may be the best sampling approach – since it is comparing actual % to estimated %. I'm just guessing at that part but that might help make it the better answer choice of the other ones listed.

Good luck!

REG: 5/30/15 - 77
FAR: TBD
BEC: 8/31/15 - 70, 73, 1/8/16 - 77
AUD: 6/1/16- 73, 8/2/16

[Double-entry Deviant]

I'm taking my exam in 2 1/2 hours. I'm doing some last minute studying – ahhhh – wish me luck everyone! 😉

REG: 5/30/15 - 77
FAR: TBD
BEC: 8/31/15 - 70, 73, 1/8/16 - 77
AUD: 6/1/16- 73, 8/2/16

[HelloCPA]

@didato good luck! remember what you studied and tell yourself you got this!

[HoosierCPA]

@didato thanks!

Good luck today!

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

[iamonloose]

Good luck! My exam was yesterday. Now we have to wait one month for the results=/

[hasy]

I took audit less than 2 hours ago, it SUCKS waiting a MONTH for the results… When you test on 12/10, you only had to wait 6 days…grrrr.

Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved - Helen Keller

-

BEC 80 (10/23/15)
FAR 72 (4/2/15); 83 (7/11/16)
REG 52 (4/28/15)
AUD (9/9/16)

Roger + NINJA MCQ + WTB

[CZzzZzzz]

Hi all,
Taking AUD on 11/26. I just took BEC on 10/1. Pretty sure I failed. I am planning on making a study schedule, and sticking to it. I work full time, so it's been a challenge to study after long days at the office.

[renma]

Hi everyone! Taking audit in two days and super nervous, as it'll be my first time sitting for any exam. Transaction cycles are my worst nightmare and I just can't seem to understand the questions, no matter what I do… good luck to everyone! 🙂

[HoosierCPA]

For special framework reports what are the key points needed in the auditors report? For some reason I thought the auditor explained the key differences from the special framework to GAAP however I just missed a question on that.

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

[renma]

@dtatham10 I believe it's that management has the added responsibility of determining the applicable financial reporting framework and, depending on which basis is used, a description of the purpose why the financial statements were prepared or an emphasis of matter to highlight that it's prepared in a different basis. I just looked through my textbook and that was what jumped out at me, hahah.

For the following question, I'm not sure why C is the wrong answer:

Which of the following best describes the difference between a compilation of prospective financial statements and an examination of prospective financial statements?

A. a compilation doesn't contemplate the auditor providing any form of assurance whereas an examination does include assurance.
B. an examination includes a statement of positive assurance whereas a compilation includes a statement of negative assurance.
C. the compilation engagement is covered under SSARS while the examination engagement is covered under SSAE.
D. in an examination engagement, the practitioner should update his/her report for known changes after the date of the report, whereas there is no similar requirement for a compilation

I got the answer right (A), I just don't understand why C is wrong. I chose A over that because it seemed to be the better answer, but the explanation is “reports on prospective FS are covered under SSAE and compilations of FS of a nonpublic entity are covered under SSARS.” I think I understand that SSARS applies to preparations, compilations, and reviews, but if that's done to an attest engagement, it will be covered under SSAE?

[HoosierCPA]

@renma thanks! So it's taken me a minute on your question but I believe I've come to the conclusion that compilations over PROSPECTIVE financial statements are covered under SSAE as well — that's why C is incorrect. Compilations over HISTORICAL financials are covered under SSARS.

I am fairly confident in that explanation but wouldn't hurt to double check my facts! haha.

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

[HoosierCPA]

Which of the following is a false statement regarding subsequent discovery of facts existing at the date of the accountant's compilation or review report?

A.Unless new information comes to his or her attention, the accountant has no obligation to perform other compilation or review procedures with respect to the financial statements.

B.If the accountant becomes aware of information that relates to financial statements previously reported on by him or her, he or she should discuss the matter with the client and request cooperation in whatever investigation may be necessary.

C.If the engagement was a compilation, the accountant must modify his or her report for a lack of independence. — CORRECT

D.If the engagement was a review, the accountant should perform the additional procedures deemed necessary to achieve limited assurance that there are no material modifications that should be made to the financial statements to be in conformity with the applicable financial reporting framework.

Ninja Explanation: “The existence of subsequent events does not impair independence, so no modification regarding independence is necessary for a compilation report.”

I more so copied this question to prove how much I overthink these questions. I went back and forth on this question for probably 10 minutes haha. Did I think in that 10 minutes the exact reasoning that ninja explains–definitely. But my brain flipped back to well maybe in very rare instances you can find out later in the engagement you have materially indirect interest in a company and didn't know it till later on. Isn't that possible?

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

[Author]

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