[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

[pharaoh]

@forem004 –
Just to clarify, Piecemeal is issuing an opinion on an account like AR, Inventory which is not allowed in an “audit”. Under attestation, You are allowed to issue an opinion on an account (Subject matter) as a separate engagement and has some limitations too regarding the opinion in relation to the whole F/S opinion if there is any.

In an audit, you can accept an engagement to audit balance sheet only as long as there is no scope limitation(as you mentioned).

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

[TheblackCPAseeker]

@Sticky Nicky

I agree with you about Roger he is way better than Becker for AUD and BEC in my opinion. I started with Becker for my AUD studies but quickly switched to Roger and I'm understanding the material much better.

How are you preparing for the SIMs?

Glad to see you finally passed BEC. I'm taking my 3rd attempt on AUD on Nov 13th and im hoping to be done with exam .

FAR - 80 (05/2015)

AUD - 68 (08/2015, Retake (07/03/16)

REG - 77 (11/2015)

BEC - Sometime in 2016

We are destined for this.

[pharaoh]

I don't know about the other sections yet, but I think because this one is more conceptual

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

[Sticky Nicky]

blackcpa seeker,,,idk what to really do about sims,,,just nailin down the concepts,,,i have done like 20 sims randomly and found them to be pretty easy,,,i hear theres really no way to nail don the sims,,,but as long as I know the concepts im sure ill be str8,,,hopin to pull a 75 out,,,i do also get tons of questions right by knowing which are wrong and narrowing it down to 1 or 2 and then taking an educated guess,,,been workin and im hoping it will also work for actual exam

[Forem004]

I'm enjoying studying for this one more than any others especially the last, BEC! More than 50% of my work is audit/comp/review related so either I know it or I'm enjoying learning the needed information!

[JT]

Thanks for the input guys!!

I for the majority of questions, I understand why the question is right/wrong. There are a few where I'm completely lost and ninja (in my opinion) does a horrible job of explaining why some answers are right/wrong for audit. It did a good job for reg though.

I feel like I have some room for improvement for my mcqs (my ‘weaker' was in professional responsibilities).

I think getting another test bank (not lecture course) will help me avoid memorizing questions and add some diversity of questions. Not sure about sims though. Ninja sims were nothing like the sims I got on my exam.

REG-80-1X
BEC-80-1X
FAR-73-1X
FAR-75-2X
AUD-September 2016

[JT]

Something seems wrong here…..

In the course of an audit, the auditor realized that an internal control is deficient, but elects not to test that control. The auditor has determined that:

A.the control would not present a reasonable possibility of material misstatement to the financial statements.

B.the control would present the possibility of material misstatement to the financial statements.

C.testing the control would result in inefficiencies in the audit procedures.

D.testing the control is not part of the audit process.

The correct answer is A.

I think it should be c.

I looked at previous post and it seems like this question comes up often.

REG-80-1X
BEC-80-1X
FAR-73-1X
FAR-75-2X
AUD-September 2016

[GiniC]

@JT –

Efficiency of the audit procedures is related to the audit firm trying to retain its profit margin on the engagement, it is never a primary reason for skipping a procedure that could impact the reliability of the evidence collected. The engagement partner is supposed to include enough budget in the project plan to include things like this. While efficiency might be a reason to consider, the more correct reason is that the deficiency really would not impact the rest of the audit. You always have to get sufficient appropriate evidence, even if it winds up costing more than you planned.

[GiniC]

Question about reporting on summary financial statements – only unmodified and adverse opinions are permitted, but I'm unclear about use of the adverse opinion.

If the opinion on the audited full financial statements is qualified, and the summary financials ARE consistent in all material respects with those audited financial statements, what opinion is given on the summary financials? If unmodified, wouldn't that contradict the qualified opinion on the complete financials? However, adverse would seem to imply that the summary statements were not consistent with the full statements, since the stated purpose of reporting on summary statements is to report on consistency rather than content.

Anybody have a solid understanding of this one?

[JT]

Thank you for your response.

For your question i think if it's a qualified opinion on the full f/s, on the summary statements, you would include the fact that the full statements was qualified and also include an unmodified opinion on the summary statements. It wouldn't contradict the full statements because in your summary statement report, your stating the full statements were qualified.

I read this and came to that conclusion… 810.20…

https://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-C-00810.pdf

REG-80-1X
BEC-80-1X
FAR-73-1X
FAR-75-2X
AUD-September 2016

[GiniC]

@JT – thanks – I read the same standard, but it didn't align with what my classroom instructor said so I was hoping someone could confirm I was reading right.

[GiniC]

The MCQ below has me a little confused – maybe I'm reading too much into it? I added bolding to show what has me uncertain.

A CPA is engaged to audit the financial statements of a nonissuer. After the audit begins, the client's management questions the extent of procedures and objects to the confirmation of certain contracts. The client asks the accountant to change the scope of the engagement from an audit to a review. Under these circumstances, the accountant should do each of the following, except:
a. Consider the reason given for the client's request and assess whether the request is reasonable.
b. Issue an accountant's review report with a separate paragraph discussing the change in engagement scope.
c. Consider the additional audit effort and cost required to complete the audit.
d. Evaluate the possibility that financial statement information affected by the limitation on work to be performed may be incorrect or incomplete.

Explanation
Choice “b” is correct. When an accountant determines that a change in the scope of an engagement from an audit to a review is appropriate, the accountant would issue a review report and would not refer to the original engagement, any procedures performed as part of the engagement, or any scope limitation.
Choices “c”, “d”, and “a” are incorrect. All of these items should be considered by the accountant when determining whether the change in engagement is justified.

[pharaoh]

I guess the question should have had the word “without” a separate paragraph

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

[Sticky Nicky]

Gina,,,the audit report never refers to the original engagement if the switch is justified,,,you have to ask yourself,,why are they asking to switch? if its because they dont want you to find something then you may need to withdraw,,,but you should always ask how much work is left to finish the original engagement,,,and why they are changing,,,i get this type of question right every time just because i know you should not refer to the original engagement

[pharaoh]

@GiniC aaaah I see it now, it says EXCEPT

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

[Author]

Replies