[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

[barfmode]

ROGERS TBS Review – Contradictory TBS Answers

Hello All,

I am taking Rogers CPA review, and working on the TBS for Audit Standards and Engagement Planning.

On the first TBS review that it has in the section, the fact pattern indicates that “TWD's Board of Directors is controlled by Mead, the majority shareholder, who also acts are the CEO.” The TBS asks whether this increases, decreases or has no effect on Audit Risk. The answer given is that it increases audit risk (management dominated by single individual can increase audit risk, opportunity to circumvent controls).

On the very next TBS review, the fact pattern states “NFB's board of directors is controlled by Smith, the majority stockholder, who also acts are the CEO.” The TBS asks whether this is an increase in the audit risk, or a decrease, and the answer given is that it decreases audit risk (owner involvement in management, it increases oversight and decreases risk of fraud).

Which is correct? Does one person's control of management and the board of directors increase or decrease audit risk?

Any help would be appreciated?

Thanks

[Sticky Nicky]

i noticed this as well,,,confused the hell outta me

[NYaccountingstudent]

Is it worth it to memorize SOX 105, 402, 404, 406, 408, and all teh other SOX ###s?

If yes, does anyone have any mnemonics to help me memorize them?

[Forem004]

Definitely increases audit risk but I have not came across this one. There must be another minor detail on the second question.

[jeff]

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

[CPA_Chik]

Hi guys!
I'm trying to come to understanding around auditing derivative transactions and how CR,IR and DR is changed by Derivatives transactions? I know/read that derivatives have a very high inherent risk, so does this mean that DR is decreased?
For example
1. if a company goes into Derivative transactions for the first time without internal control procedures related to those transactions, then:
IR increase, CR increase, for me it looks that DR decrease?

2. Let's take the previous scenario with internal controls in placed, then:
IR increase, CR decreases, DR increases?

3. Or if the company hires an expert in Derivatives, then:
IR increases, CR same, DR decrease?

REG - 75!!!
FAR - 66; 73 (FML!!!)
AUD - 09/16
BEC - TBD

[Spartans92]

does anyone know if moving exam up cost money? Im actually farther ahead of becker's schedule. I want to take this before thanksgiving because I know I wont be able to get anything done that weekend.

BEC- PASS

[GiniC]

@Spartans92 – Yes, but the earlier you make the change the less expensive it is. More than five days before your test date, I believe it's $35.

Congratulations on being ahead – I'm in the opposite situation for FAR, so now I'm trying to study FAR and AUD at the same time. 🙁

[Spartans92]

Yikes… Why would you do that? LOL I can never study 2 simultaneously. I would if I could for both too since FAR is next on the plate.Perhaps I should try so I have a backup window… my question is how do you keep things straight?

BEC- PASS

[GiniC]

@Spartans92 – We are capable of far more than we think we are! I don't think there's any real need to “keep things straight” – Most of BEC, FAR, and AUD overlap, so I just focus on getting everything into my head. Oh, and re-stuffing the things that try to escape!

My biggest struggle has been mild depression from becoming isolated by the need to study constantly. Keeping my eye on the prize – December 10 I will be free, at least for a few weeks. If I have to retake one, (most likely FAR) I will not resume studying until after Christmas – I need a break!

[Spartans92]

Thanks. if you don't mind me asking. How far r u into FAR? LOL. I don't know if I should start but that only gives me 5 weeks for FAR. I just cant afford to fail both. at the same time I would hate to fail in jan and retake in April.

BEC- PASS

[Forem004]

@cpachick….I have not came across risk related to auditing derivatives so in researching your question I realized how much I need to study this topic. Look at “au section 332”. I'm going to read over this a few more times.

[CPA_Chik]

@Forem004 I saw that pronouncement and read it all. From what I understand, the auditor establishes IR and CR individually and bases his DR of it. So, if IR is already high, auditor just needs to evaluate CR and adjust DR accordingly so the equation would balance.

REG - 75!!!
FAR - 66; 73 (FML!!!)
AUD - 09/16
BEC - TBD

[GiniC]

@Spartans92 if you haven't started FAR yet, I wouldn't try it (if you could even find a seat at this point).

I've finished four of ten Becker chapters, and probably won't be able to really cover all of the other six before my scheduled test date. I've already paid for it though, so I plan to do a chapter a week and rush through the last couple in the final prep week. I might as well try – nothing to lose but a bruise to my ego (and there are plenty of those on the forums!).

I'm really focusing on AUD at this point, since I have time to do it justice. I'm taking a live class and using it to keep me on-pace for my exam scheduled on the last day of the window.

[Sticky Nicky]

@GiniC you can actually find a seat within a few days of the date you are looking…People tend to reschedule last minute,,,so when you look at the prometric scheduling you will see openings 2 or 3 days after todays date…last minute i feel is almost better,,,bc right now I wish i had scheduled AUD for tomm instead of next Wednesday.. I'm ready! and to wait another week sucks because maybe i forget something in that timeline…I think for FAR im going to schedule last minute when im good and ready for the next day

[Author]

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