[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

[Sticky Nicky]

was i correct? I think observing inventory does actually tell you who owns the inventory

[ahsq]

@nicky, you are right! i was thinking that for consignment there is NO need to review AR given that consignment inventory only affect GL when they are actually sold.

I thought that inventory would be observed because if not, who knows that the consigned inventories are actually in the possession of the consignee??

[TheblackCPAseeker]

@ahsq
Just think out loud.

Consignment does not mean sales – (Which means that inventory is included in the entity's inventory balance)

For example if the client reports a 100 items of inventory (With 20 items on consignment off site)

How would the auditor find out about the 20 items on consignment? by observing the clients inventory count which will reveal 80 items of inventory and the auditor would ask the client about the 20 missing items and the client would tell them they are on consignment.

I hope my example makes sense. Its important to understand the terms involved and think about what is going on.

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.

[ahsq]

@seeker,

thats exactly what i thought, the question is asking
“Which of the following audit procedures is least likely to bring this new fact to the auditor’s attention?”

My thought is that AR has NOTHING TO do with this new fact if client is doing the right accounting.

physical Inventory on the other hand would be adjusted, however the books would now show

inventory 80
cosigned inventory 20

if the question is asking MOST likely, then I'd picked observing INV.

[ahsq]

…..sh!t, it just clicked, so the question is asking which choice does the CPA NOT care about…..
its observing the inventory, caz it will show a difference physically but remain the same on the books.

F these tricky ass questions seriously!

[JT]

I was actually thinking B, Test of cash receipts transactions.

There isn't any exchange of cash when things are out on consignment until they are sold (I guess the auditor may realized that payments are coming from the consignee).

I looked up the answer and it is D, but it doesn't make sense to me. If an auditor completes a confirmation and notices that inventory is actually 80 in the warehouse when the recorded amount says 100, the auditor should be thinking “there is something wrong here, maybe the recorded amount is misstated, maybe they are out on consignment”.

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

[TheblackCPAseeker]

@JT

You are right, it narrows it down but it doesn't exactly pinpoint it to it being a consignment situation. You still have to perform other procedures (Inquiry) to determine whether the inventory is on consignment or not.

Its really a thin line. I get why this is confusing.

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.

[Sticky Nicky]

tired of studyin this boring ass subject,,,audit sucks!

[TheblackCPAseeker]

@Sticky Nicky when is your 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.

[Spartans92]

@sticky, FAR is 10x worst! LMAO. I do like REG lot more though because I feel its more relatable to us.

BEC- PASS

[Sticky Nicky]

Wednesday

[ahsq]

gl homie im tomo

[Spartans92]

Good Luck guys!!

BEC- PASS

[JT]

@sticky

Your using 4 sets of mCQ? Wiley, ninja, becker hw, and roger? How is that going?

Or anyone else, how are the other test banks? I'm 3 weeks away from my test and I'm considering getting another test bank. I'm currently using ninja mcq.

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

[Sticky Nicky]

yea but becker and wiley are 2014 versions that i got for free..i mainly use roger and ninja mcqs…i didnt go through all of the wiley this time around because it was getting redundant,,,same questions across all materials,,,it went well with BEC though

[Author]

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